Thursday, May 3, 2012
Crowdfunding and the Creative Monopoly
Early this week, the Washington Post ran an editorial titled “The Creative Monopoly.” Author David Brooks used the example of PayPal founder Peter Thiel to make the case that business and innovation discourse in the U.S. is too concerned with competitiveness – at the expense of creativity. This is not limited to America: Canada recently ranked D in innovation performance. What often gets lost in the competition discourse is that the best business solution may not be to inch ahead of industry leaders, but rather to create a new market all together. “Instead of being slightly better than everybody else in a crowded field, create a new market and dominate it.” This type of creative business thinking is what makes start-ups such a valuable force in our economy. It is our hope that Canada will be seeing a lot more creative being nurtured in the near future as we push for the legalization of crowdfunding as a source for investment.
Earlier this month, the US legitimized the JOBS Act, officially opening up a new source of funding for small US-based companies and start-ups. Part of the bill allows financing via crowd funding permitting participants to raise as much as $1 million a year without having to pursue a IPO.
To “crowd fund” is to seek small equity investments from friends, family and network using the Internet and Social Media.
Working closely with the Canadian Advanced TechnologyAlliance (CATA), I am leading the movement in Ontario to bring our legislation up to speed. It is our belief that unlocking this source of funding in Canada will create more opportunities for capital to flow into start-ups, which, in turn will help stimulate the growth of intelligent communities.
Start-ups are important sources of creative business thinking – unlocking crowdfunding investment opportunities in Canada will help grow those sources and re-direct our business discourse to creative innovation.
Here is a link to a piece in the Globe and Mail about our efforts: "Why Canada is Far Behind the US"
On May 24th, Sherwood Neiss co-founder of the US investment-based crowd funding effort, will speak about the movement during a CATA conference happening in Newmarket from May 23-24, 2012. He plans to speak on the advances in technology, the Internet and social media that allow an entrepreneur to crowdfund a limited amount of capital from friends, family and the community under a framework that provides for investor protection. I encourage you to join us and help make crowdfunding a reality.
For more information on the conference, click here: http://www.n6bizseries.ca/
For our press release, click here: http://www.cata.ca/Media_and_Events/Press_Releases/cata_pr05021202.html