[ibimage==24472==Large==none==self==ibimage_align-center]
During a Startup Phenomenon panel last Thursday, a few great minds got together to break down how venture capitalist, angels, crowdfunders and all the rest fit together in what was dubbed “The Finance Chain.”
The highly-energized conversation between the audience and the panel, which included University of Cambridge’s Alan Barrell, Rockethub’s Brian Meece, RVC's Peter Adams, and Impact Angel Group’s Elizabeth Kraus, seemed as though it could have lasted all day. These seasoned entrepreneurs provided insights on crowdfunding, pairing social investing while not forgetting about profit margins, and the difference between investing in intellectual property and investing in a management team:
1. Investing in the management team is crucial.
Investors often poke holes in pitches and business plans, but overlook holes in the team. This is a mistake that often becomes costly and leads to failure.
2. Regulations on investing are changing for the better.
“We can walk into the casino and blow all of our money, but can’t invest in a friend’s company?” This is exactly the sort of thought that is crossing the minds of many aspiring investors as they dip their toes into the crowdfunding pool - and it’s causing a stir among investment regulators. Right now, there are so many changes being made to rules surrounding small, unaccredited investments and how to report them that regulators can’t keep up. Last year, with the JOBS Act, it became possible for crowdfunders to receive company equity for their investment, not just be thanked with a product or a discount. There are many positive changes currently stirring with the SEC and Congress that are allowing crowdfunding to disrupt the trading world: it’s a whole new world out there!
3. “Good opportunities are wealth-creating and philanthropic.”
Kraus detailed what she means by social-impact investing: the term means that investors are getting a return and making an impact (it is possible to do both, really!). The best investments are ones that keep an overall vision in mind and that focus on sustainability, not investments that are driven by quick profits or are viewed as “philanthropy” or a “donation.”
Stay tuned for more Startup Phenomenon lessons learned this week!