Open for All

Crowdsourced equity funding will create an explosion of creation and innovation.

Yesterday, an SEC panel voted unanimously to propose rules under the JOBS Act to permit companies to offer and sell securities through crowd funding. The rule now goes into a public comment period before a final SEC vote.

If a final “Aye” vote is passed, this will change everything and open the doors to an explosion of creation and innovation. It would mean that anyone could fund startups, not just venture capitalists, angel investors or accredited investors who have held the purse strings of innovation.

This gives hope to inventors and entrepreneurs who lack connections or a stage to present their ideas, and can open the door for ideas that don’t fit into the group think of what is hot in the Valley (B2C, SAS, Cloud, Enterprise, B2B, BaaS, etc.).

This shift also creates a new opportunities for the middlemen, the third party curators and arbiters of diligence, who will work with the crowd and build businesses to evaluate and opine on the worthiness of an idea, invention, entrepreneur and company.

The domino effect of this ruling and subsequent crowd-sourced diligence, will initiate a Cambrian evolutionary ‘explosion’ of creativity, innovation and startups. We’ll see Chris Anderson’s Long Tail take shape and be applied to the millions of entrepreneurs with ideas and investors willing to assume risk and looking for returns better than a T-bill. These investors have diverse interests that will be matched with ideas that suit their passions and pocketbooks. Michael Nielsen does a great job in explaining how this is already working in different fields in his book: Reinventing Discovery.

Yes, there will be abysmal failures and lots of people will lose lots of money. However, there will also be unprecedented discovery, innovation and wealth creation as a result of open access funding.

Like I said. This will change everything.