You can feel the ground trembling. Maybe it’s the fact Kickstarter has already succeeded in attracting over one million people to pledge more than $100 million since it’s launch in 2009.
Maybe it’s the fact that HR-2930, the Entrepreneur Access to Capital Act, a bill which allows Kickstarter along with a myriad of crowdfunding sites to raise capital from the sale of securities to individual investors (not just today’s accredited investors) is pending in the Senate and expected to pass. And that President Obama supports it.
Maybe it’s it my realisation yesterday of the dramatic rise in Google searches and surge in media articles on Kickstarter as seen on Google Trends that have taken place recently.
Maybe it’s that Kickstarter and HR-2930 just capture the zeitgeist in the streets. For interestingly, supporters of HR-2930 include The Move Your Money campaign which encourages individuals to divest from large financial institutions such as Wall Street banks.
And maybe it’s not that unusual. As Candrina Bailey commented in a fierce debate to a somewhat strange Entrepreneur Magazine post , today thousands of small businesses are funded offline by family, friends and partnerships. As she points out, today you can go out to Kiva and contribute funds to international projects, but you can’t do the same for small businesses on our domestic turf. She’s right. HR-2930 combined with crowdinvesting sites simply unleashes an already existing force online to the much wider scope of Joe and Mary Consumer-Investors.
Maybe it’s that some Kickstarter-funded companies have already executed well. Projects like the Tik Tok , an iPod Nano watchband, broke Kickstarter records, raising $941,718 via 13,512 investors, ultimately attracting Apple to carry the design in their stores.
Or consider startup Quinn Popcorn, raising $28,000 within one month for it’s organic, sustainably-produced microwaveable popcorn. According to Reuters, the product is now sold in 25 retail stores in the Boston area. With such companies, coming out of the chute with an enthusiastic customer base and promising to grow, this clears the path for a much sought after element in the economic landscape: Job creation.
Maybe it’s the fact that Kickstarter transparent process will fuel rapid learning by companies and investors alike, releasing the tacit knowledge of capital raising, once held only in the sanctum sanctorem of private equity deal-making offices.
Maybe it’s that well-known VC, Fred Wilson, investor in Kickstarter, recently decried in his post “Mocked and Misunderstood”, that the misconceptions over the company are exactly the forms of resistance which presage a significant shift in the way we do business. As Fred points out, the naysayers of Twitter in 2008 voiced similar skepticism.
Just maybe, as Scott Francis astutely points out, it’s the inherent capital efficiencies of a “Design-Sell-Build” process over the traditional “Design-Build-Sell” in Kickstarter’s process. After all, a crowdfunded project avoids waste (only building if there’s demand), lowers inventory and provides early consumer feedback.
Or maybe it’s just that we’re about to discover, just as Threadless did for Crowdsourcing and Twitter for Social Media, that companies like Kickstarter offer something truly transformative: Crowdinvesting our way back to The American Dream.
No wonder the ground is trembling.
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