Crowdfunding Panel at University of Illinois
On May 10, I had the privilege of being asked to take part in a panel discussion about crowdfunding at the University of Illinois’s Academy for Entrepreneurial Leadership.
If you’re not familiar with the term, crowdfunding is a way that large groups of individuals can donate money to a group -- such as musicians, independent filmmakers, campaigns or entrepreneurs -- to help them get their projects off the ground. Individuals donate money to groups on websites, such as Kickstarter.com, RocketHub.com and more, and sometimes those individuals are considered “investors” in the companies they donate to.
Held at the Illini Center in Chicago, the panel discussion featured entrepreneurs, venture capitalists, investors and attorneys who spoke about the benefits and drawbacks of crowdfunding.
The topic was especially relevant because on April 5, President Obama signed the JOBS Act, which legalizes crowdfunding investing in the United States, although crowdfunding does not currently have the same safeguards and regulations that are currently placed on traditional investments.
When I started my business in 1998, crowdfunding did not exist, and today, it can open up a whole new world of financing to entrepreneurs. However, there are many unanswered questions about how crowdfunding will affect entrepreneurs.
For example, when you post information about your startup business on a crowdfunding website, you can’t keep any of your trade secrets confidential to your competitors. Plus, when an entrepreneur has thousands of investors, how much can those investors tell you how to run your company?
It was fascinating to be part of such a lively, topical discussion, and I am glad I was able to contribute to a broader dialogue about this interesting business trend.