On Fri, Feb 21, 2014 at 11:35 PM, Kevin O'Malley <[email protected]>wrote:
Crowdfunding is the use of the internet to raise small sums of money from > large numbers of investors. Current US law allows organizations such as the > Martin Fleischmann Memorial Project to raise funds through crowdfunding but > it doesn’t allow them offer to offer equity (stock or ownership) to those > who put up money. Nice. Sort of like Kickstarter with equity. The one million cap is a pittance. It will allow software startups to get going, but anything focusing on hardware (e.g., LENR prototype development) is going to burn through amount quickly. Having the SEC closely involved is also a possible damper. It's one thing to log into Kickstarter, create an account and start a campaign. It's another to apply to a federal bureaucracy, submit documentation and obtain permission (assuming permission is needed). Also, venture capital would laugh at finance on this scale. They generally want something that they can really put a lot of money behind, and something that will potentially have a huge ROI -- think of the 19B acquisition of WhatsApp by Facebook. I'm pretty sure there are some happy VCs involved in that purchase, who will take away a disproportionate part of the money as a reward for their hard work, risk-taking, shrewd insights and brilliant advice. But even with a teansy cap of one million, this amount is enough for a software startup to "bootstrap" its way to profitability, possibly cutting VCs out of the loop entirely and allowing the employees to retain full equity throughout the life of the business. Even though something like Kickstarter with equity feels like it could be a positive development overall for LENR, despite the tiny cap, I'm also wary of a thousand LENR scams blooming. Although venture capital and angel investors could potentially be hoodwinked by a dishonest or self-deceptive player, they're on their guard and are generally willing to do some due diligence. I think there is much less of an impulse to do due diligence among LENR watchers more generally, so there could end up being a lot of money thrown away on projects that are 100 percent unpromising. That's the abstract analysis. More likely, I don't see this changing the situation all that much, because it doesn't seem like there is a lot of money to go around in LENR right now, even making it easier for everyday supporters to participate. Eric
