When the jobs legislation signed into law in April, employers are happy, even giddy, at the prospect. They and other supporters see it as a force that could pave the news of new sources of capital for entrepreneurs create jobs, boost the economy and giving Wall Street investors wary profitable alternative. It’s one of those disruptive innovations come once the generation and radically alter the competitive landscape. It was so potentially revolutionary that the financial pros and experts alike predict will put a lot of venture capitalists and banks out of business – in other words, just like changing the game of chance that makes entrepreneurs to dream big.
Well, ten months later, the enthusiasm has cooled. Not for potential current crowdfunded, but for a realistic chance it will be implemented in the near future and in a form that respects the original intent of legislators to reduce bottlenecks that prevent so many entrepreneurs and small business owners get the capital they need to grow, rentals and growing. SEC, which was assigned to write the rules that regulate the nascent industry crowdfunding by the end of the year, has missed the deadline was (not surprisingly-the agency is concerned about the potential for fraud and had a lot on my plate already). Most people now believe crowdfunding investment really will not take place until 2014. At the same time, it seems likely that the new rules would require crowdfunding portal to set up much like a conventional broker-dealers – in other words, over Merrill Lynch from eBay, as one observer put it. For better or worse, crowdfunding may turn into a game not for idealistic entrepreneurs but for the National Investment Pro.
As I wrote in my feature for the New York Times yesterday, despite the uncertainty, the outlines of a new industry began to take shape, and with it a glimpse of what the future might look like crowdfunding: promising young companies are able to obtain funding from the those who believe in them, regardless of their net worth investors; new jobs created by the availability of growth capital, and wider sharing of prosperity and economic opportunity. Of course, there is the risk of fraud and lost with crowdfunding. But then, that happens every day on Wall Street. As Thom Ruhe, vice president for entrepreneurship at the Kauffman Foundation, told me, with an economy stuck in limbo, a greater risk to the economy is to not do anything at all.