History of CrowdFunding

Overview

Signed into law on April 5, 2012 by President Obama, CrowdFunding provides reduced costs and opens additional sources of capital to the entrepreneurial and small business community by allowing them to leverage the power of social media. The industry has seen explosive growth in recent years. In their May 2013 report, industry analyst Massolution reported an 81% growth rate for 2012, predicting $5.1 billion in worldwide volume for 2013. With prominent investors such as Google Ventures, Donald Trump, Reid Hoffman, Mike Maples, Michael Birch and Tim Ferriss joining the crowd, the opportunity becomes even more apparent.

A market in hyper-growth, with no sign of slowing down and an audience eager for resources creates the perfect storm for businesses looking to connect and offer resources to the small business community.

With A&E, CNBC, and Yahoo launching CrowdFunding TV shows similar to Shark Tank, CrowdFunding is dominating the news cycle. The Securities and Exchange Commission is has released rules for Title III CrowdFunding this year and people are hungry for meaningful education and content related to crowdfunding. Seeing an opportunity to produce a high-quality web-based summit that provides the small business community access to the world’s leading minds on CrowdFunding, the CrowdFunding World Summit 2013 was born.

Timeline of Important Developments

1996

Spring Street Brewery started by Andy Klein posts it’s ‘Regulation A’ direct public offering on its website, and the SEC issues a release allowing companies to post their public offerings online.

Direct IPO platform is formed by Mark Perlmutter to let the general public invest directly in small public offerings – this is a precursor to CrowdFunding.

1997

OffRoad Capital begins online roadshows of private offerings to accredited investors after raising $50 million from VCs.

Andy Klein announces Wit Capital Broker Dealer will offer IPOs to the general public online and later raises $33 million in its own IPO.

1998

Silicon Valley VC Tim Draper forms and raises $300 million for MeVC a public venture firm which allows the general public to invest in early tech deals alongside VCs.

2000

ArtistShare launched by Brian Camelio is the first successful platform for fans to pre-fund albums of popular bands.

2006

Australian Small Scale Offerings Board (ASSOB) allows general public to invest (and by 2013 raises $132 million for 200 companies).

Michael Sullivan coins the term “CrowdFunding” in his blog: fundavlog.

2007

Grameen Bank founder Muhammad Yunus awarded Nobel Prize as his platform passes $6.8 billion in micro-loans to ultra-poor so they can start businesses and escape poverty.

2008

Danae Ringelmann, Slava Rubin, and Eric Schell form IndieGoGo, a rewards CrowdFunding platform for films, then launch at Sundance film festival.

2009 

Perry Chen, Yancy Strickler and Charles Adler start Kickstarter for rewards based CrowdFunding. (In 2012 Kickstarter will skyrocket to $300 million raised for 18,109 projects)

Paul Spinrad past editor of Wired magazine working with the Sustainable Economies Law Center petitions SEC website to exempt investment offerings where all investors are within 200 miles of a company.

2010

RocketHub rewards CrowdFunding platform – started by Brian Meece, Jed Cohen, and Vladimir Vukicevic focused on creative projects – becomes one of three most popular along with Kickstarter and IndieGoGo.

Global CrowdFunding reaches $900 million.

US citizens intensify lobbying of Congress to pass a CrowdFunding bill.

2011

McHenry&Mark jpeg
Congressman McHenry (R-NC) accepts Mark Perlmutter’s
invitation to speak in the Summit

Patrick McHenry (R-NC) authors Crowdfunding Bill in the House of Representatives.

Total global CrowdFunding reaches $1.4 billion.

Congress passes JOBS ACT by an overwhelming majority and Obama signs it. SEC must write rules by January 1, 2012.

SEC Chairperson Mary Shapiro resigns after missing deadline set by Congress to issue rules.

Global CrowdFunding passes $2.6 billion, with more than 1 million campaigns funded.

Forbes article quotes venture capitalist Fred Wilson predicting $300 billion from the private sector will be unleashed by CrowdFunding for companies.

Kansas & Georgia become first states to legalize intra-state CrowdFunding, long before the federal law takes effect. Washington and North Carolina proffer bills.

January 2013

SEC misses second deadline set by Congress to issue rules. SEC gets new Chairperson: Mary Jo White who announced she will prioritize issuing rules for CrowdFunding.

September 2013

Rules on Title II advertising for Accredited Investors become effective, after being issued July 2013.

October 2013

Title III proposed rules are released by SEC with 90 day public comment period. This includes more than 500 pages of rules and 295 questions for the public to answer.

December 2013

First Annual CrowdFunding World Summit with more than 65 global leaders provides the most comprehensive education to date covering this fast changing field for entrepreneurs, small business owners and investors.

 

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Exhibiting Firm Services: We have multiple exhibitors in our hall this year offering a variety of services for crowdfunding, entrepreneurship and small business services. See vendor booths or visit their websites for Best Merchant Service Providers.