Comments on: Money of the Crowds: Crowdsourced Funding http://www.sitepoint.com/blogs/2008/08/21/money-of-the-crowds-crowdsourced-funding/ News, opinion, and fresh thinking for web developers and designers. The official podcast of sitepoint.com. Sat, 07 Nov 2009 23:35:20 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: James_White http://www.sitepoint.com/blogs/2008/08/21/money-of-the-crowds-crowdsourced-funding/comment-page-1/#comment-784231 James_White Thu, 21 Aug 2008 20:08:45 +0000 http://www.sitepoint.com/blogs/?p=2870#comment-784231 @ timothy_plank - Small point of argument: percentage vs. quantity. The size of the investment shouldn't have any direct sway on the <em>percentage</em> of return -- just the overall size. 10% is still 10% whether you're talking about 10% of five figures or 10% of seven figures. The point about increased management costs associated with the flood of transactions is definitely true if you don't redesign the mechanism. On the other hand, publicly held corporations manage to fulfill the SEC requirements for disclosure and input to <em>all</em> of their investors (granted that's a level playing field). Just design the management model for efficiency with oversight... isn't this what technology is embraced for? I don't see how someone couldn't make a sizeable return on <em>smartly </em>placed microinvestments, talk about the ultimate in risk management! @ timothy_plank – Small point of argument: percentage vs. quantity. The size of the investment shouldn’t have any direct sway on the percentage of return — just the overall size. 10% is still 10% whether you’re talking about 10% of five figures or 10% of seven figures.

The point about increased management costs associated with the flood of transactions is definitely true if you don’t redesign the mechanism. On the other hand, publicly held corporations manage to fulfill the SEC requirements for disclosure and input to all of their investors (granted that’s a level playing field). Just design the management model for efficiency with oversight… isn’t this what technology is embraced for?

I don’t see how someone couldn’t make a sizeable return on smartly placed microinvestments, talk about the ultimate in risk management!

]]> By: Tony T. http://www.sitepoint.com/blogs/2008/08/21/money-of-the-crowds-crowdsourced-funding/comment-page-1/#comment-784162 Tony T. Thu, 21 Aug 2008 17:46:39 +0000 http://www.sitepoint.com/blogs/?p=2870#comment-784162 This has been tried. Cambrian House (http://www.cambrianhouse.com/) is the first one that comes to mind... This has been tried. Cambrian House (http://www.cambrianhouse.com/) is the first one that comes to mind…

]]> By: timothy_plank http://www.sitepoint.com/blogs/2008/08/21/money-of-the-crowds-crowdsourced-funding/comment-page-1/#comment-784110 timothy_plank Thu, 21 Aug 2008 15:22:25 +0000 http://www.sitepoint.com/blogs/?p=2870#comment-784110 For an investor to see a decent return on a fairly risky venture, they need a decent percentage of equity. In turn, startups generally need a decent sum of money. Crowdsourcing to a large number of people simply wouldn't provide a return as their individual percentages would be very low. You would also require a lot of administration to communicate with all your investors. Considering for a moment that you could offer a return on small investment stakes, you then have the problem of who has management control or influence. If you had a few hundred minor investors, you'd be struggling to accept input from each of them, and struggling to find the time to explain yourself to each of your investors. The idea is fun but the reality I think is too disconnected. What could potentially work is a scenario where startups fund startups. A small group of startups club together to invest in other ventures, where they not only bring funding to the table but a wealth of combined experience. Of course, this extends to any group of companies who can provide expertise and are willing to collaborate, though you'd find other startups understanding the concept a lot quicker. Timothy <a href="http://www.mylifeoftravel.com" rel="nofollow">www.mylifeoftravel.com</a> For an investor to see a decent return on a fairly risky venture, they need a decent percentage of equity. In turn, startups generally need a decent sum of money. Crowdsourcing to a large number of people simply wouldn’t provide a return as their individual percentages would be very low. You would also require a lot of administration to communicate with all your investors.

Considering for a moment that you could offer a return on small investment stakes, you then have the problem of who has management control or influence. If you had a few hundred minor investors, you’d be struggling to accept input from each of them, and struggling to find the time to explain yourself to each of your investors.

The idea is fun but the reality I think is too disconnected.

What could potentially work is a scenario where startups fund startups. A small group of startups club together to invest in other ventures, where they not only bring funding to the table but a wealth of combined experience. Of course, this extends to any group of companies who can provide expertise and are willing to collaborate, though you’d find other startups understanding the concept a lot quicker.

Timothy
http://www.mylifeoftravel.com

]]> By: marcel http://www.sitepoint.com/blogs/2008/08/21/money-of-the-crowds-crowdsourced-funding/comment-page-1/#comment-784070 marcel Thu, 21 Aug 2008 13:45:33 +0000 http://www.sitepoint.com/blogs/?p=2870#comment-784070 I've thought of doing something like this. It would would well as WP plugin or Facebook app. The banks need the competition... I’ve thought of doing something like this.
It would would well as WP plugin or Facebook app.

The banks need the competition…

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