Is crowdfunding a possible way for economic development agencies to help their local businesses?

Michael Sauvante
February 7,
Michael Sauvante  replied:

Possibly.

However, if that were to be done one business at a time it would likely result in the same difficulties that individual small businesses (especially startups) would have. Liquidity (or lack thereof) in such an investment creates resistivity on the part of the investor public. 

Instead of helping to use crowdfunding on a one-on-one basis, I believe a better approach is to have those agencies form a pooled fund that can be taken public and have that pooled fund do the investments in those individual companies. That way the companies get the money they need but the investors can have the liquidity of a public company.

See this article I wrote on the topic: How to Increase the Flow of Capital to Small Businesses While Enhancing Liquidity for Investors (SBHCs) 9/6/2016 https://www.linkedin.com/pulse/how-increase-flow-capital-small-businesses-while-michael-sauvante//

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Michael Sauvante
February 7,
Michael Sauvante  replied:

Possibly.

However, if that were to be done one business at a time it would likely result in the same difficulties that individual small businesses (especially startups) would have. Liquidity (or lack thereof) in such an investment creates resistivity on the part of the investor public. 

Instead of helping to use crowdfunding on a one-on-one basis, I believe a better approach is to have those agencies form a pooled fund that can be taken public and have that pooled fund do the investments in those individual companies. That way the companies get the money they need but the investors can have the liquidity of a public company.

See this article I wrote on the topic: How to Increase the Flow of Capital to Small Businesses While Enhancing Liquidity for Investors (SBHCs) 9/6/2016 https://www.linkedin.com/pulse/how-increase-flow-capital-small-businesses-while-michael-sauvante//

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Samson Williams
February 10,
Samson Williams  replied:

I'd say "Absolutely." 

Because the real question is why don't local economic development agencies also have their own FINRA approved crowdfunding portal? 

Setting them up isn't very hard and if they would like the CfPA can run it, as part of its non-profit mission. 

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