More travel, more work, less time to read… but I still want to share my favorite reads of the month.
There is a lot of financial innovation in it : the expansion of equity crowdfunding in the US, the expectations and dissillusionment around blockchain, but also broader innovation project’s like self-driving cars and its impact on advertising. Here are eight articles that I thought were worth being shared in my monthly digest.
The U.K. is Europe’s leading crowdfunding market, in terms of numbers (not that much in terms of innovation), which is mostly due to the very favorable regulation across the Channel.
In this Crowdcube blog post, Luke Lang writes about the domestic market, and shares his opinion on the evolution of some players: “The lack of traction from some platforms is concerning and highlights possible weaknesses in their models […]. I’ve never believed that niche marketplaces for investment crowdfunding are viable and I don’t see market consolidation through mergers and acquisitions happening anytime soon.“
Another article that looks at data, but it’s from another type of player (the famous Y Combinator incubator) and with another angle (a look at past application data). Almost 10 years of start-up application data to today’s most prestigious incubator is very informative pertaining entrepreneurship in the last years and broad industry trends. Business models, competitors, underlying technologies… fascinating insights.
One excerpt: “Bitcoin-related ideas were briefly very popular, but fell off rapidly. These days, building things on top of the underlying blockchain is on the rise, and seems set to surpass bitcoin itself.“
This month, the U.S. allowed “non-rich” (meaning non-accredited investors) to invest in start-ups through equity crowdfunding platforms. The idea of allowing this to happen stemmed from the JOBS act a couple of years ago, but practically it took the SEC four years to lay out the rules of this regulatory measure.
This Fast Company article discusses the news and talks to some platforms which chose NOT to follow this regulatory opportunity and which keep the business-model they were forced to adopt in the last years. Many other aspects are looked upon in this article, which is a great read for anyone in the industry.
Same context, different article. The NYTimes portrays entrepreneurs – both on the platform and on the fundraising side – who hope that this regulation will allow their business to thrive.
The article takes the same optimitic-realistic angle than Fast Company in the previous article: “While supporters cheer the new rules as a democratization of high finance, […] skeptics worry that regular investors might get only the leftovers. They may dream of discovering the next Facebook. But the most promising companies […] may also be the ones least likely to bother raising money in small dribs from the crowd, they fear.” I think the crowd simply hasn’t the same aspirations than venture capitalists.
This one is still about equity crowdfunding, but it looks at it from a semantic perspective. In other words: is the term ‘equity crowdfunding’ here to stay, or should we use other terms to truly reflect the activity of platforms, the desires of investors, the needs of funded companies? “Let’s stop calling this process crowdfunding. We are seeing the rise of marketplace investing” writes Ryan Caldbeck, CEO of the platform CircleUp.
I agree with the idea of critically looking at a term like ‘crowdfunding’ but I also believe it is risky for any business to drop a term that has gained mass recognition. I think the industry needs to savvily handle terms like ‘crowdfunding’ and ‘fintech’ and ‘P2P’ as all tend to be used by consumers and the press. Just stay true to yourself as a brand, as an organization, and you won’t have to invent new terms.
Same website, same topic, still written by an industry insider… but a slightly different story. Jeff Lynn, co-founder and CEO of the UK-based equity crowdfunding platform Seedrs, writes about why it too the U.S. so long to come up with a permissive rule for equity crowdfunding.
He posits that the 1929 crisis has led to a cautious and protective approach to regulation in the US, which is meant to protect ordinary people and their savings, and that this principle has also applied when it comes to equity crowdfunding. “Until [the] United States builds a level of future-proofing into its financial regulation — perhaps through a principles-based regime like that in the U.K.[…] — Britain’s lead over the United States in innovative finance will continue to grow.“
“For the first time since its creation, Bitcoin is in danger of losing its status as the world’s leading cryptocurrency. The new challenger is a Bitcoin-like technology called Ethereum that has seen a surge of interest from users, developers, and the corporate world,” VOX writes. This article explains how Ethereum is different to Bitcoin, and how it is much more than (just) a cryptocurrency.
The article also, and thankfully, takes a step back by saying that it is likely that Ethereum will be used for illegal activities – like Bitcoin was. “You can use ordinary financial networks to hedge against changes in the price of wheat or crude oil, but if you want to hedge against changes in the street price of cocaine, a smart contract might be your only option. Ethereum could [also] become a platform for online betting.” A very comprehensive and objective piece, a great read to stay updated on latest evolutions in the financial world.
This last article is different than most of the previous ones: it looks at Google as an advertising company, and not a technology company. Why? On VentureBeat, Aoplovin’s Adam Foroughi says that Google is not just innovating with a technologically advances mobility solution, but also building an advertising platform that – coupled with Google Maps – will be of tremendous utility for users… and of great value for advertisers.
“Although the biggest and most obvious impact of self-driving cars will be convenience and potentially safer roads, their prevalence will still have a ripple effect and impact other industries [like] advertising. […] In 10 years or less, we could well look back on self-driving cars as the beginning of the end for outdoor advertising, the nail in the coffin of radio, and a shot in the arm to mobile apps.“