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Gareth Everard has an interesting article on TechCrunch discussing what he believes crowdfunding will look like in the near future.
The golden age of irrational exuberance on Kickstarter has ended — Pebble is shutting down, marking the fall of crowdfunding's white knight after a string of other high-profile closures and failures.
Originally positioned as a medium for (especially arts-related) projects to garner modest seed funding from a diverse group of supporters, crowdfunding platforms like Kickstarter and Indiegogo have obviously evolved since their respective launches in 2009 and 2008. Yes, crowdfunding has produced some inspiring success stories that have grown into innovative businesses, like Peak Design and Flow Hive.
However, it also has facilitated the transfer of significant sums of money to teams that ultimately proved themselves to be incompetent, leaving backers with nothing. Recent headlines have been chock full of projects that have declared bankruptcy or otherwise betrayed their early backers, exposing cases where founders' and companies' egos have simply overtaken their ability to reason, plan and communicate logically or truthfully.
Have the high profile failures doomed crowdfunding?
(Score: 2, Interesting) by NewNic on Monday January 23 2017, @06:18PM
Kickstarter and others are, to some extent, a workaround for regulations that prevent ordinary people from making potentially risky investments. The rules limit such investments to people who are already wealthy.
When will Trump eliminate these rules? He said he was going to reduce the regulatory burden.
It's interesting to note a historical precedent: The beginning of the downfall of Venice was the closure of economic opportunities to all comers, limiting it to the already wealthy families. [nytimes.com]
lib·er·tar·i·an·ism ˌlibərˈterēənizəm/ noun: Magical thinking that useful idiots mistake for serious political theory
(Score: 3, Interesting) by meustrus on Monday January 23 2017, @08:43PM
A distinction must be observed between several different styles of regulation. What you are railing against are regulations aimed at protecting citizens from themselves, such as seatbelt laws (but for investments). But many financial regulations are more about preventing fraud; this is the primary activity of the SEC and is the reason why publicly traded companies are required to publish earnings reports. Still other regulations are intended to limit the damage that could be caused by failures, especially those that could cause other failures in an economic chain reaction like the recession in 2008; Dodd-Frank was supposed to be this but failed to live up to the New Deal-era regulations that were repealed in the 1980s.
The challenge is to design a suite of regulations that guarantee safety to the unambitious while allowing risky but potentially profitable ventures for the ambitious. A great example of this challenge is the FDA, which requires pharmaceutical manufacturers to prove purity, safety, and efficacy. To varying extent, all three of these regulatory goals ought to be unnecessary to an informed public. But purity and safety regulations protect the uninformed consumer from companies that an informed consumer might avoid, perhaps even preventing the kinds of accidents that would inform the informed to avoid that brand to begin with. And without efficacy requirements, many drugs would never see the kind of necessarily expensive large-scale clinical trials that produce crucial scientific evidence for prescribers. At the same time, the entire system is gamed, cheated, and ignored, and the costs associated with many of these protections justifies the massive costs that big drug companies overcharge us while simultaneously erecting a massive barrier to entry for any newcomers seeking to disrupt the system. It sucks, but at the end of the day, are we really willing to fix it if that means throwing away the proof that drugs are safe and effective?
The key is to prove that the benefits are an illusion. Can it be proved to the American public, especially the medical elite, that efficacy studies are so thoroughly gamed as to now be useless? Similarly, I challenge you to name specific regulations that provide an illusory benefit. Because when you say "regulation is bad", I think of the broad economic deregulation of the 70s through today that steadily killed the America that Trump wants to bring back.
When it comes to the FDA, one solution would be to eliminate efficacy studies but maintain purity requirements and safety studies. Purity can be managed by the factory, allowing drug developers to rely upon existing factories with proven purity records to avoid those regulations. Safety studies, while still a burden placed on innovators, are a much smaller burden than efficacy studies because it's much easier to prove the null hypothesis (this drug causes no harm) than anything else.
How might other industries be partially deregulated while still maintaining (or even creating) basic, easily enforceable, and relatively unobtrusive regulations to keep the average citizen safe?
If there isn't at least one reference or primary source, it's not +1 Informative. Maybe the underused +1 Interesting?
(Score: 1) by NewNic on Monday January 23 2017, @09:23PM
I suspect that you may have missed my point (and perhaps the element of mild sarcasm).
I don't expect this administration to roll back the limits on risky investments, because such action won't benefit the already wealthy. My point was to highlight the hypocrisy of the current administration.
As for other regulations: many of them are required to protect government finances from reckless gambling by the banks using funds that are guaranteed by the FDIC.
lib·er·tar·i·an·ism ˌlibərˈterēənizəm/ noun: Magical thinking that useful idiots mistake for serious political theory