Backbone of the economy
In the US, small businesses account for 99.7% of all employers and from 2000 to 2017, they were responsible for the creation of more than 65% of new jobs.
It’s clear that entrepreneurs who start small businesses can be powerful forces in boosting economic growth and creating jobs. In fact, the US Senate recently held a briefing of the Entrepreneurship Caucus, to discuss crowdfunding and issues that impact entrepreneurs, because they seek to understand why startup rates have dropped to a near 30-year low. Included in this study will be an examination of “access to capital issues” and “geographic concentration of venture capital”, which will likely highlight the reasons that many entrepreneurs are acutely familiar with.
Innovation and entrepreneurship should be an available option to all Americans, so it’s a positive sign to see that the Senate is taking this matter seriously. Hearing that “fewer and fewer new businesses are launched every year,” as mentioned by Senator Klobuchar, means that this might be an opportune time for new ideas and initiatives. Let’s hope the Entrepreneurship Caucus highlights the fact that in 2018, equity crowdfunding was responsible for pumping almost $1 billion into local economies since its inception.
Crowdfunding is a popular concept
Collecting a small piece from ‘the crowd’ is such a common practice, it even has royal roots. In 1938, a British Duchess used crowdfunding to help a family flee Austria to Canada before WWII. While the Duchess’ crowdfunding campaign wasn’t offering equity (it would have been considered donation-based crowdfunding), it highlights how long the concept of pooling money for a cause or initiative has been practiced by people.
More recently, crowdfunding allowed researchers to continue studying the migration patterns of Russian eagles, after the feathered misfits accidentally racked up a huge phone bill! The eagles (one in particular) left the scientists “penniless” and they would have been forced to stop their research if the crowdfunding campaign hadn’t been a success. Talk about soaring to new heights!
The Engine that Could
We seem to be witnessing a paradigm shift happening; common beliefs around economic prosperity (namely, who gets to have it) are being challenged by more and more ‘have-nots’. Whether a budding entrepreneur creates a startup or a so-called less fortunate person simply wanting the same opportunities afforded to the rich – the JOBS Act has laid the track for change. Equity crowdfunding is like a new chapter of the ‘Little Engine That Could,’ steadily moving forward, offering a renewed optimism for life, work and the American Dream. All Aboard! It’s time to choo choo choose equity. #PayMeInEquity