Thoughts about Crowdfunding for Startups (4/4)

This is my last post about this topic, and here I provide few crazy ideas to enable startups to crowdfund from non-accredited crowd investors and enable crowd investors to exchange stocks of those startups.

I would like to flip the whole situation!! I mean to think that venture capitalists or VCpreneurs (as opposed to entrepreneurs) are the ones to raise money from the crowd to manage by investing it in startups in an “Open Fund Management Model”.

Let’s imagine that there is an “Open VC Firm” in which VC fund managers will periodically select few seed stage startups after filtering out the unserious ones, and then shareholders of those funds will participate in the decision making process by voting internally to decide in which startups to invest. Shareholders can also “internally” or “privately” exchange stocks after providing stock analysis and auditing reports by the firm’s management. An online voting and trading platform could be developed for this purpose and only shareholders can access it. The VC firm will provide the legal framework, and VC managers will be able to structure follow up investment rounds by other VC firms or even a total exit by a merger or an acquisition.

This open VC firm could be managing small parts of a group of private multi-employer pension funds that are dedicated for risk investments. As an open fund management firm, participating employees in the fund will be voting and trading the stocks internally.

In another scenario, what if there is an Open VC Corporation!! I mean a publicly traded corporation with a core business of VC investment!!! In this case, shareholders of this corporation will be voting and trading the stocks internally.

In a little bit different scenario, what if there is an already public Holding Company that allows its shareholders to select startups or entrepreneurs to invest with, in an “Open Corporate Management Model”. Again, shareholders will be voting and trading the startups stocks internally.

Why would this click? Simply because it empowers people to participate in the decision making process of their own fund’s investments.

Although this will not be open to all the crowds, but at least it will not be restricted for only accredited investors. And the more success this open VC firm, open VC corporation, or open holding company models achieve, the more crowd investors, people, will be willing to get involved.

Could this work?! Maybe!!

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