Wednesday, 3 October 2012

GrowVC Flying Cars


Flying Cars?
Crowdfunding seems the buzz of the town, right? We at Grow VC have been hard at work with 'crowdfunding', even before the term was brought to life. Despite the current upbeat market around the global phenomenon, it's been a long journey to get to this point. But now that we have reached this point in time, where are we headed?

To state that the mood for crowdfunding is all cheers and laughs, would be misleading. However, when discussing a new, emerging financial market, a superficial approach to handling and building a sustainable new framework would be plain wrong. There are several issues and topics to be raised, which is why we also have taken an active role in the dialogue. The discussion is healthy and should be thorough, to understand the topic at hand and work out what gaps need to be addressed.

In the present, opinions are still divided. However, there is no illusion that the current financial models or the ones that led us into the financial crisis, are the answers we are looking for. The reception from the financial market and those who already operate in the early stage funding market, has been a clear signal for change, as many established actors start to explore and embrace new, more transparent and democratic funding models.

Sure, there is still some hurt ego in the established sector, mainly stemming from misunderstandings on what the new funding market is and how it should work. Some see it as a replacement to their activities, when it should most likely be viewed it as a complement. Some limit their view on equity funding alone, which as a sector is surely important, but not nearly sufficient for an effective market. Equity funding serves one niche in the market, that one niche is small in a grander scheme of things. What about small and medium size businesses? Surely you can't expect a restaurant to be bought out at 100 times the valuation of your investment?

Existing models in the early stages suffer from low liquidity, which can surely benefit by bringing more effective participation into the mix. No one doubts the lack of liquidity and the struggle that often faces angel investors and founders alike.

The wider ecosystem at hand is also calling for more connectedness, where players are not fit into isolated buckets, but can work and communicate with one another effectively. The Grow VC Groupis announcing solutions to the paradigm revolution later on this fall, and we are currently working with hundreds of partners in various clusters. By introducing more models for direct participation, from local ecosystems, such as universities, incubators and alumni networks, to effectively support themselves, we are surely laying the building blocks of tomorrow.

We invite anyone looking to create more sustainable and effective complements to their operations, to get in touch or start using our 'networks concept'.


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