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If the customer would receive shares of the company in exchange for their money, that’s just investing. There are public platforms for crowd investing of start

If the customer would receive shares of the company in exchange for their money, that’s just investing. There are public platforms for crowd investing of startups, but they require users to be accredited investors due to regulations. That’s not the real issue, though. The real issue is that good startup teams don’t have any problem raising normal investment capital right now. The only companies who would even want to raise money from the public would be those who couldn’t get normal investment, which are almost exclusively bottom of the barrel companies that have been passed on by many professional investors. For many reasons, not just regulatory, you don’t really want to have thousands or tens of thousands of tiny investors to manage for your startup. Companies tried to skirt regulations with the ICO craze a few years ago. It was almost universally a complete disaster for investors. A lot of ICO companies got extremely wealthy and a lot of investors discovered that without the regulations and share ownership they don’t really have much of anything.

mkdirp 5y ago
> There are public platforms for crowd investing of startups, but they require users to be accredited investors due to regulations. Perhaps in the US? In the UK we have Crowdcube which anyone can sign up to and invest in new (and older) startups.
- phphphphp 5y ago
  There's also Seedrs which was just acquired by Republic[1], the major US platform pursuing the crowdfunding model. The difference vs. Kickstarter is the barrier to entry: companies must go through approval to list on CrowdCube, Seedrs, Republic etc. (which is probably for the best!). The OP is correct though, crowdfunding (in the UK at least) is complete and utter garbage, where most companies raising are untouchable by traditional investors. [1] https://republic.com/ https://republic.com/
BerislavLopac 5y ago
> If the customer would receive shares of the company in exchange for their money, that’s just investing. How about the customer paying for future services?
- TrueGeek 5y ago
  Isn’t that just normal Kickstarter
- PragmaticPulp 5y ago
  > How about the customer paying for future services? That’s just Kickstarter.
m_ke 5y ago
> The real issue is that good startup teams don’t have any problem raising normal investment capital right now. I know plenty of founders of companies that raised huge rounds from top VCs and most of them would have preferred to avoid dealing with VCs if there was an alternative. VCs are a hurdle and their incentives are not really aligned with yours. Getting buy in from your customers and peers is a much more sustainable path long term if your goal isn't to pump and dump your business in 4-8 years. The VC path is littered with dead companies that could have been sustainable mid sized businesses and successful mid sized businesses that were pumped full of cash and ran off the cliff.

mkdirp 5y ago

> There are public platforms for crowd investing of startups, but they require users to be accredited investors due to regulations. Perhaps in the US? In the UK we have Crowdcube which anyone can sign up to and invest in new (and older) startups.

phphphphp 5y ago
There's also Seedrs which was just acquired by Republic[1], the major US platform pursuing the crowdfunding model. The difference vs. Kickstarter is the barrier to entry: companies must go through approval to list on CrowdCube, Seedrs, Republic etc. (which is probably for the best!). The OP is correct though, crowdfunding (in the UK at least) is complete and utter garbage, where most companies raising are untouchable by traditional investors. [1] https://republic.com/ https://republic.com/

BerislavLopac 5y ago

> If the customer would receive shares of the company in exchange for their money, that’s just investing. How about the customer paying for future services?

TrueGeek 5y ago
Isn’t that just normal Kickstarter
PragmaticPulp 5y ago
> How about the customer paying for future services? That’s just Kickstarter.

m_ke 5y ago

> The real issue is that good startup teams don’t have any problem raising normal investment capital right now. I know plenty of founders of companies that raised huge rounds from top VCs and most of them would have preferred to avoid dealing with VCs if there was an alternative. VCs are a hurdle and their incentives are not really aligned with yours. Getting buy in from your customers and peers is a much more sustainable path long term if your goal isn't to pump and dump your business in 4-8 years. The VC path is littered with dead companies that could have been sustainable mid sized businesses and successful mid sized businesses that were pumped full of cash and ran off the cliff.