The Securities and Exchange Commission in the US has opened up America to a crowdfunding boom and the boss of a Cambridge fund is predicting a goldrush from the crowd on the other side of the Atlantic.
Gonçalo de Vasconcelos, CEO of SyndicateRoom (pictured above) – one of the UK’s top crowdfunding platforms – says the SEC’s decision could help revolutionise the investment model in the States.
But far from spelling the end of VC investment in the US – as some commentators are forecasting – the move should nudge venture capital funders higher up the ladder to prop later-stage deals, de Vasconcelos believes.
The SEC has finally passed the JOBS Act, Title III, opening up equity crowdfunding to small investors in the world's largest market and de Vasconcelos believes the success of crowdfunding in Britain has blazed the trail.
He said: “The UK has led the world in equity crowdfunding. Over 500 UK companies have been funded to the tune of around £200 million, powering innovation, creating jobs and more. Now we welcome American businesses and investors to this nascent industry.
“The approval of Title III of the JOBS Act in the United States is a landmark and will finally allow ordinary Americans to support and invest in the businesses of their choice.
“The coming months will see a rush of cash to fund US equity crowdfunding platforms as they jostle to secure first-mover advantage. Enthusiastic commentators might even forecast the end of conventional venture capital.
“While the equity investment market will be fundamentally changed, VCs are here to stay, and I expect them to be pushed further up the ladder towards later-stage deals while equity crowdfunders come to dominate early-stage seed deals.
“What seems certain with this welcome news from the SEC is that equity crowdfunding is moving beyond the realm of ‘alternative finance’ and going mainstream.”
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