What has made America an economic giant. It is the ability of its citizens to innovate and create new ideas and new technologies into the next leap forward. Americans have been able to take these steps because as a people we have believed that anything is possible with some determination, some elbow grease and some cool tunes on your iPod.
Despite what some in the media have said, America has not slowed down in its innovating ways the rest of the world has caught on that anyone with a great idea can make it happen with a few simple things. You need a great idea, hard work, a great team and adequate working capital The entrepreneuring spirit is growing all around the world with governments recognizing that new companies mean jobs for their citizens.
America continues to lead in innovation in many areas. Everyday inventors and creators are coming up with new and better ways to make life more enjoyable. Groups have sprung up all across America to help the inventors and creators of tomorrow make it happen today. The biggest problem to all of these people and groups is the age old problem of access to capital.
In today’s economy small businesses can have an incredibly tough time raising the needed capital to start their businesses. In the United States various securities regulations limit the numbers of investors and can make raising relatively small amounts impossible. The typical funding cycle starts with an entrepreneur asking his friends and family to invest in the new venture. When unemployment is over 9% and savings at lows this can be a tough proposition. This friends and family round can be as low as $5,000 and up to $100,000 in total capital raised for a new venture. This money is often used to more fully develop a concept or product and do some work toward proving market viability.
In the 1700 and 1800’s the original entrepreneurs were often pioneers setting forth to settle the vast American continent. They sold their belonging purchased a wagon and farming implements received some money from their friends and family, then set off to follow the American dream. Back then the high tech start up was a farming homestead on the frontier. When they got to their new farm, if they had neighbors they might all pitch in and help raise a barn.
Today the high tech frontier might be a killer app for an iPhone or a new gadget. Someone may have an idea for a film or a music project. The ideas are limitless, unfortunately the cash is not.
The concept of crowdfunding offers a solution to this problem. It extends an entrepreneurs group of friends and family to everyone on the internet. For those unsure about the crowdfunding concept it is the process of placing a pitch for a project, either entrepreneurial, artistic or charitable on the internet where it can be found by a large number of people with the hope that the “crowd” will contribute individually small amounts of money toward meeting the necessary fund-raising goal for that particular pitch. The concept of crowdfunding and crowdsourcing relate back to the 1980’s and has developed over the years along with the evolution of the world wide web.
There currently exists several crowdfunding websites on the Internet, but my partners and I felt that they were lacking certain necessary entrepreneurial elements that we felt were necessary to help people create successful projects or businesses. So we took our decades of experience as successful entrepreneurs and created a new crowdfunding website, www.funderthunder.com, which we feel can work for everyone from the project creators to the funders.
FunderThunder starts when someone launches a project. First they create a project profile page, which in an engaging and informative manner, informs potential funders about the project and its creators. This profile defines how they hope to complete the project with the help of Funder Thunder’s community of Funders, the project funding goal and what rewards they are offering in exchange for receiving funding.
Funders then review projects on FunderThunder. They have the opportunity to ask questions directly of the people involved with the project. If they find a project they would like to support, they provide a credit card number to authorize the amount they have chosen to fund. Once enough Funders have contributed to the project funding goal, all Funders of the project will be charged the amount they have chosen to fund. The project creator then receives the funding, minus the administrative fees given to Funder Thunder.
We look at FunderThunder as part of our mission to help regrow the world wide economy. According to the Small Business Administration “Small businesses—those with fewer than 500 employees—are generally the creators of most net new jobs, as well as the employ¬ers of about half of the nation’s private sector work force, and the providers of a significant share of innovations, as well as half of the nonfarm, private real gross domestic product.” The Small Business Economy 2010: A Report to the President by the Small Business Administration.
It is our feeling that a great crowdfunding site can help reinvigorate the economy by helping small projects become successful and start hiring people all across the country and the world. We are not the only ones who feel this way, President Obama in his American Jobs Act has made several proposal to help crowdfunding sites help entrepreneurs fund their business dreams.
Under current United States law, companies cannot offer equity in exchange for funding a project. The American Jobs Act proposed to change those laws to allow crowdfunding as a way to raise equity in the United States. This process is already legal in various countries around the world.
Republican Rep. Patrick T. McHenry of North Carolina recently introduced a crowdfunding equity bill called H.R. 2930, the Entrepreneur Access to Capital Act, legislation. This bill is consistent with the goals set forth by President Obama. Congressman McHenry’s bill would provide a crowd-funding exemption to SEC registration requirements for firms raising up to $5,000,000, with individual investments limited to $10,000 or 10 percent of an investor’s income. The exemption would erase limits on the number of investors until the first $5,000,000 of equity capital is raised. This proposed exemption will provide smaller investors an opportunity to support startups, which currently is not an option under current SEC regulations. Crowdfunding sites wishing to provide this exemption must be compliant with SEC regulations which have yet to be determined. This bill is still proceeding through Congress and it is unclear when and what the final bill will look like.
With or without the ability to offer equity a crowdfunding platform like FunderThunder can help start up businesses become a reality and jump start a new round of job creation driven by American entrepreneurs and inventors. That is what makes America great.