Crowdfunding as it evolves in the US is a trend we are following. Inspired by new SEC regulations for raising capital in the US and meant to stimulate jobs creation, the crowdfunding trend continues to generate industry media interest.
PE Hub says that VCs should be paying more attention to sites like Kickstarter, reporting that a couple of early stage accelerators focused on innovative hardware and gadgets are using it to not only raise capital but also test consumer demand.
Not all the opportunities are in tech and industrial companies as the intriguingly titled, Why I left Private Equity…And Started A Crowdfunding Site article reveals. It is written by the founder and CEO of CircleUp, an equity-based crowdfunding platform focused on consumer and retail companies, and makes a pretty good argument for this type of investment.
Yet another PE industry insider has started up a company to help entrepreneurs actually execute on their plans and achieve the milestones required by new investors, according to BW. Meeting project milestones and deadlines is already a problem on sites like Kickstarter, says the report.
It is pretty clear from the reports mentioned here that the challenges faced by investors using the crowdfunding sites are the same as for other private equity investors and entrepreneurs, identifying good opportunities to invest capital might be difficult, but it is not where the real challenges lie, execution by entrepreneurs and fulfilling the business goals are the crucial elements that decide who is successful and who is not.