With the passage of the Jobs Act, small investments have become legal, allowing for a new wave of innovation in the sphere of company financing. Michael Norman, co-founder of WeFunder, spoke with Chris Dorobek about his new platform allowing for crowdsourcing investment in Gov 2.0.
Smaller investments have the potential to reinvigorate Gov 2.0, as individuals with an interest in having their problems solved may be more likely to fund these companies than large investors. Large investors usually go for a tenfold return on investment. However, there isn’t much to show for that kind of a ROI in Gov 2.0 yet, so smaller investors who are happy with less of an ROI as long as their needs as civilians are met may be leading the way.
Norman clip 1 by cdorobek
Also, people using these crowdsourcing platforms will likely be more interested in stories than traditional investors. Companies using WeFunder are companies that they will be excited to be part of the mission, not just the final return. It’s about a relationship, not just a transaction.
It’s also about letting more people into the equation. People who aren’t extraordinarily wealthy can become part of the funding process like never before. There are some good protections for these small investors in the legislation, such as background checks on Chief Officers and making sure they don’t invest all of their income.
Norman clip 2 by cdorobek