$VSTR - the younger hipper version of VC
Great article in early investing today. It gives us vision into why $VSTR chose to engage with equity based crowdfunding portals. (And yes, it has paid off financially. Did you read that post today about Deuce Drone? $VSTR's investment was worth $700,000 in January, and now it is worth $2 million, as Deuce Drone is selling shares at $1.00 per share, and VSTR owns 2 million shares.)
The article discusses the democratization of fund raising; it says:
Crowdfunding can't fix the social ills of this country by itself. But it can be part of the solution. New companies -- with 99% of their growth ahead of them -- are the economic engine of the U.S.
Per dollar of revenue, they hire more people than any other group of companies. They provide a pathway for entrepreneurial citizens of any background and race to participate in our economy and reap the profits that come with entrepreneurial success. Crowdfunding helps provide capital to the most deserving startups -- especially those beyond San Francisco.
I think of crowdfunding as the younger, hipper and fairer cousin of venture capital investing. Especially these days, the fairness part means something.
As an outsider to the tight-knit circle of Silicon Valley investors, crowdfunding resonates with me. It was purposely set up (in the JOBS Act of 2012) to democratize startup investing. Congress rightly decided that everyone should have the ability to invest in startups.
In the decades leading up to 2012, that was far from the case. Startups had made hundreds of Americans enormously wealthy. But it was a very insular community. It was mostly white men in Silicon Valley investing in startups begun and operated by white men in Silicon Valley.
The vast majority of Americans were shut out. And that included minorities, who were underrepresented among both VC firms and among startups seeking money from those firms.
Crowdfunding has been much better. Fairness and inclusiveness are built into the DNA of crowdfunding. Crowdfunding democratizes access to capital. And it gives me the freedom to be objective and discerning in selecting the best startups for Early Investing's community of investors. Diversity comes naturally.
I believe in American exceptionalism. I believe foremost that Americans are exceptional entrepreneurs and innovators. That they have a knack for creating amazing companies. And crowdfunding aims to leverage this exceptionalism. It assumes that no one group has a monopoly on how to build a dominating company. So we have to keep the process as inclusive as possible.
