How Equity Crowdfunding Can Swell to a $300 Billion Industry
Crowdfunding represents a "true business case" for the social Web presence for businesses, he says.
"For the last few years businesses have been told you've got to have a Facebook (FB) profile, you've got to have a LinkedIn (LNKD) profile, you got to be on Twitter. You have to do all these things, but as the owner of a business, the question is 'Why?' And where's the revenue model and why am I going to spend this time on it? ... Because it's also going to be how you raise capital going forward," Best says.
Not everyone believes the crowdfunding industry has the potential to become so widespread.
To put it in perspective, at the end of the third quarter, small-business lending by banks (loans with a balance of $1 million or less) totaled $642 billion, according to FDIC call data.That compares to just $1 billion to $1.2 billion in funding annually by the entire category of alternative lending, according to Biz2Credit.com "Crowdfunding is a good idea, but the question is how to build it into long-term scalable business? Can a business owner keep coming back for funding two to three times each year? The regulations aren't set in stone yet. I don't think they have figured out the mechanism
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