Although our research puts emphasis on reward and donation-based crowdfunding, we learnt a great amount about the world of equity and debt-based crowdfunding yesterday. The latter two focus on generating financial profits for investors, in contrary to relying on altruism. The person who educated us on this topic is Kim Wales, founder and CEO of Wales Capital. Her company advises individuals and companies who wish to use crowdfunding to raise capital. She also regularly communicates with politicians to lobby for regulations to unlock the full potential of debt and equity-based crowdfunding.
Kim Wales believes that crowdfunding can open up capital markets to the general public. Currently investing in capital markets is mostly accessible for wealthy investors. Through equity and debt-based crowdfunding, also individuals with lower incomes will be able to profit from financial returns. Mrs. Wales expects a radical change in the entire financial industry with the spreading crowdfunding as an investment vehicle.
We also discussed key success factors. With all types of crowdfunding campaigns trust is very important. People running a crowdfunding campaign should realise that social media alone does not convey enough trust. Personal communication is very important to gain sufficient trust from people to invest in your project.
To hear from Kim Wales about the potential of equity and debt-based crowdfunding was extremely enlightening to us. The concept is still in an infant state, but might rapidly increase in popularity once all regulations are aligned. Wales Capital offers a free consultation service to discuss any questions you have with regard to crowdfunding. The website is walescapital.com.
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