Funders got Funded!
Kickstarter may have the market cornered when it comes to coverage on this blog, but while you sit around distracted by all the interesting projects arriving on the scene, how can you possibly stay abreast of all the latest developments in crowd funding news? Well – we’re here to help; when not sitting around drooling over the latest comic books and board games to land on the front page of Kicktraq, we scour the internet for all things crowdfunding. While you sit shopping, who funds the funders?
Turns out, it’s venture capital, and this week its made big news.
(Fund The Wardenclyffe Horror!)
Wired wrote an interesting story last week, about a new crowdfunding site to hit the scene: Funders Club. This one isn’t out to sell you copies of a retro video game or indie comic though. This one wants you to make serious investments ($1000 minimum) into tomorrow’s startups. “Our philosophy is that it should be as easy to invest in private companies as it is to invest on E-Trade for public companies,” says co-founder Alex Mittal. The aim of funders, is to make it easy for new people to explore the soon-to-be deregulated market of micro venture capital.
I would love to tell you more about the company, or leave you with more than just Wired’s main point: they raised $6,000,000 of private equity from investors. Sadly though, i can’t. In what is a very counter intuitive move, this funding site that needed funds to make itself ready for a surge of interest won’t let you see their website as a non accredited investor while interest is, umm – surging. I could understand it if they assigned me some kind of trial account, or if they didn’t let me invest any money until it was actually legal to do so, but making a crowd funding website for the masses, and then not letting the masses take a look at said website? That doesn’t say much for forethought on the subject.
Currently I am on their waiting list; if I receive any further developments on the subject, rest assured that I will share them with you, my loyal readers.
Caffeineforge 
That’s a shame you cannot see more without accreditation. I’d be interested to see if that changes in the future.
When I know more, you’ll know more. Promise.
It is definitely a good start if this does indeed pan out.
Closed access is not the fault of Funder’s club… It’s the law. I have this unique position as being in financial services (Series 6, and Series 63) and game design, so I have a bit more information about what’s going on behind the scenes. Part of the tests to get that licensing was studying the SEC laws regarding investing.
Even so called ‘crowd funding’ sites cannot open themselves to the general public because of the laws of the U.S. and the guidelines of the SEC, FINRA, and other regulatory agencies. Funders Club cannot sell shares in a company without being a Broker Dealer. No one can sell, or facilitate purchases in, investment opportunities unless they are Broker Dealers. Part of the laws following the great depression were set up to protect people with no investment experience from buying into scams. The same holds true with crowd funding.
Even with my registration I may not be able to invest in these companies. I may need to have Series 7, and permission from the company that sponsors me… Which I don’t currently have.
Jeremy – thank you for the detailed response. I understand why I can’t invest in equity crowd funding. I covered it in a post last week.
My major point, and perhaps this didn’t come across well, was that because of the USA Jobs act is going to open the doors to possible funders like me in the near future ($5,000 annual limit or 10% of gross income, which ever is greater) they should have done a better job of previewing their content.
Since – you know, the Wired article was all about how they got this VC because this change was coming. Seemed like a wasted opportunity for them.
Ah, I see! That they really should explain better. Maybe I need to brush up on the Jobs Act.