Venture Capital & Crowdfunding

I started giving loans through Kiva almost two years ago. About at the same time, after gathering some savings, I started investing again in the stock market.

Last month, I attended TEDxMadrid, where Nicolás Alcalá explained how a movie he and his team are working on (“El Cosmonauta”) will be financed through crowdfunding. I then discussed with a friend that precisely I was looking for a similar approach, but applied to general businesses: a kind of Kiva for for-profit start-ups.

Subsequently, I first found Kickstarter about a month ago through Fred Wilson (@fredwilson). However, in Kickstarter the funders of projects are not entitled to equity in the venture nor a share of the future profits. The funders get some merchandising or recognition for the helping hand they have given, depending on the amount they have invested.

Then I found GrowVC.

From what I gathered, this is more or less what I was looking for: a way to invest some small amount of cash (~1,000$ a year) together with other funders into a larger pool that will act as a Venture Capital operation, sharing the future profits of the business that was funded.

With this post I wanted to share these initiatives with you and also to explain what I was looking for. Now, let me throw an open question to readers: anyone knows a similar concept that I may be interested in? If so, please, let me know.

(Bear in mind that I haven’t got, yet, hundreds of thousands of Euros to invest following this approach… the larger part is invested in a much more Graham-like defensive approach)

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8 Comments

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8 responses to “Venture Capital & Crowdfunding

  1. Hi Javier,

    Thanks for the nice post! There are quite some crowdfunding platforms out there. You can find an extensive overview on: http://www.smartermoney.nl/#platforms For-profit platforms are still quite new and small compared to non-profit platforms like Kiva and MyC4. I am co-founder of CrowdAboutNow, a for-profit crowdfunding platform, based in the Netherlands. We are launching at the end of this year. I am really interested in your experiences at GrowVC!

    Gijsbert

    • Hi Gijsbert,

      Thanks very much for your comment and especially for the link you shared. That is exactly what I was looking for; several platforms / initiatives of this kind, as I haven’t made my mind yet whether to work/use GrowVC or another (I will have to go through some of them doing some research, reading reviews…).

      Best of luck with CrowdAboutNow!
      Javier

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  3. Kevin Lawton

    Javier, I just released the book, The Crowdfunding Revolution, a macro book about the current and future landscape of the socio-economic phenomena that is crowdfunding, much from an entrepreneur’s viewpoint (I’m a many-timer myself). There is no doubt that crowdfunding will absolutely change the way that innovation is funded. If you’d like to review the book, let me know.

    -Kevin Lawton, author
    http://www.thecrowdfundingrevolution.com/

  4. Hi Javier,

    Take a look at our website. We are petitioning Congress & the SEC to update the securities laws to make crowd fund “investing” legal. The goal is to allow the average American to crowd fund our nation’s entrepreneurs who do not have access to capital and for YOU to own a piece of the pie. We’ve made quite a bit of progress with the Wall Street Journal covering what we are doing as well as getting invited to a Congressional Hearing on the topic on May 10, 2011.

    Regards,
    Woodie

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