The news has reported several times over at this point that the Senate has voted to approve the JOBS Act (Jump-start Our Business Start-ups), which (among other things) allows for the crowdfunding of capital of up to $1 million annually without needing to register the shares for public trading with the Securities and Exchange Commission. The amendments to the bill have been made and run through both the Senate and the House and it has been announced that the President will sign the bill into law on Thursday… that’s today!
What’s nice about this initiative passing – beyond the doors it opens up for start-ups and other small businesses, is the general approval on both sides of party lines about the bill itself. The bill passed 73 to 26 in the Senate and then 380 to 41 in the House once the proposed amendments were integrated. And, with the polarized politics that you so often hear about, it’s nice to see that sometimes they’re on the same page. And the bill has been known to be supported by the President for some time now, which is why it’s generally expected that it will be signed today.
IdeaScale (as it’s also constantly evolving) has introduced the ability to crowdfund on our platform. With just a few clicks, your project can be off and running whether it’s fundraising for your next dog sled race or raising the start-up capital for your new dotcom company. And with IdeaScale, you can fundraise by ideas so that those initiatives that are popular rise to the top and generously grow as each new fan supports it.
With an industry that’s projected to grow by 500% by 2013, it’s no wonder that 90% were in favor of the bill that supports a new way of fundraising for business, the arts, and more.
What do you project for the future of crowdfunding? What would you like to see next from IdeaScale?
This November the House of Representatives passed HR 2930 (the “Entrepreneur Access to Capital Act,” a bill that allows startups the ability to utilize crowdfunding in order to source capital). This bill marks a new era for crowdfunding in which startups can offer securities through social mediums in order to grow their businesses.
The bill, of course, isn’t law yet. The Senate also introduced a bill in November that basically shares the same goals as HR 2930 with a few distinctions (including investment minimums and maximums, funding caps, and the Senate bill requires the use of an intermediary like Kickstarter to process the investments, among other things). However, the bill was read twice in December and is currently being referred to the Committee on Banking, Housing, and Urban Affairs. If it passes, it will be reconciled with the House and then referred to the White House. So it still has a ways to go. Scott Edward Walker wrote a very helpful article on what small businesses need to know about the House bill.
The bills couldn’t be more well-timed, however. If you’ve given to Kickstarter in the past year, you received an update from them this week about their year in summary. And it was a big one. All told, Kickstarter alone saw more than $99 million pledged in the past year (and Kickstarter is still less than three years old). In the past year, 65 crowdfunding platforms were launched around the world (80% of which are focused on creative or artistic projects). With these bills in the house, I’m sure that these numbers have nowhere to go but up, across all industries. Just before the year ended the TikTok project raised more than $942,000 for their project alone.
There are a number of tips to follow on how to succeed when sourcing funds through platforms like Kickstarter? What do you think some of the key elements are of a successful crowdfunding campaign? How do you think things will things change if the crowdfunding bill is put into law?