GlyEco Overview
The United States is WAY Behind Europe In Citizen Capitalism
I spent last week in Europe seeing the future of equity crowdfunding up close and personal.
UNLIKE the US (which has yet to define the rules of equity crowdfunding for capital hungry entrepreneurs) most European countries have approved equity crowdfunding for years. Equity crowdfunding is where actual equity capital is raised and ownership sold to investors on a crowd funding platform like SymBid.com or FundingCircle.com.
This is real direct equity ownership of a company…NOT “donation crowdfunding” like Kickstarter.com or Indiegogo.com where projects are funded via donations or pre-sales in return for product benefits and premiums received by the donor.
For a continent that where the populous have a very LOW direct ownership of stocks and our financial media kick them to the curb for being socialists…it’s amazing to see them embrace this public venture capital model AHEAD of the United States.
But it’s a new age for the citizen investor who backs these startup companies…and when we finally get our act together, citizen investors will create a new asset class—Equity Crowdfunding.
When you combine Equity/Debt crowdfunding to both accredited and non-accredited investors (so called “qualified crowdfunders with household income of over $60k) we see over $30 TRILLION in long-term investments.
1% of that capital annually dedicated to equity crowdfunding is $300 billion a year.
But come with me…imagine how this will work in real life. My company NBT Group, Inc. has started a new newsletter publishing company Next Big Thing Media LLC. We are currently selling subscriptions to our first newsletter “Next Big Thing Investor PRO” on our web site NextBigThingInvestor.com (and YES…you should subscribe!).
Sometime in September we will launch a donation crowdfunding effort that will include a subscription to the newsletter AND a copy of my new book Next Big Thing Investing: Earn 25%+ Every Year from the Transformation Economy. Instead of going to a newsletter publishing company we keep 100% of our revenue vs. 12-15%.
We will run this pre-sale campaign on KickStarter.com and/or Indiegogo.com where they will raise over $1.5 billion in donation crowdfunding in 2013. Kickstarter.com is valued >$800-$1.2 billion btw and will go public next year.
Next, as we grow our newsletter and digital media business (and equity crowdfunding is approved) we will look to sell 10% of the new company via an equity crowdfunding by telling our exciting growth story to…our existing customers!
We will sell a combination of convertible debt and equity via this customer direct approach—to income and growth investors. These investors will be ACTIVE in our company—they will be the beta testers for new products and services and bring their best ideas.
Why? Because they are investors!
ALL this fundraising will come from our Next Big Thing Crowdfunder platform—which we will license from one of the leading approved equity crowdfunding platform providers. Check out Symbid.com to get an idea of how our platform will look and feel.
Now consider the advantages to the business founder(s). NO venture capital funds to take 60-80% of our company in return for constant pain and meddling from the board member we would have to take in the deal.
NO SBA loans where we pledge our home equity for 12% loans or Business Development Corps (BDCs) who also want equity warrants for additional upside for their money. Losing your house is a BIG deterrent to entrepreneurship!
If we want to expand our fund acquisitions…we go BACK to our hopefully happy investors and do another “tranche” of debt/equity crowdfunding at a HIGHER valuation.
The next big thing in small business and startup capital formation IS crowdfunding.
Too bad the United States—the country where the “business of America is business” is so far behind the Europeans in embracing this citizen led activist form of capitalism.
A wee bit ironic isn’t it?
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Founder and Editor-in-Chief for NBTEquitiesResearch.com. Contributor and Anchor for the Fox News Channel and Fox Business Network 2000-2013. Chairman & CEO of NBT Group, Inc., a boutique private capital investment bank and investor relations organization.
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