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Crowdfunding gets personal with GoFundMe

Brenda Lynn says her autistic son Kaleo, 3, hardly speaks, and his inability to express himself frustrates him – except when he’s using his speech therapist’s iPad.

“The iPad really controlled the tantrums and helped him communicate,” said Lynn, 39, of Orlando, Fla. “I tried to get him one, but I couldn’t afford it on my own. I applied for grants, but I wasn’t lucky enough.”

So Lynn, who is unemployed, turned to Facebook and GoFundMe.com, a crowdfunding website that allows people to solicit cash for personal causes. She asked for $500 and raised $620 in 17 hours.

Crowdfunding sites such as Kickstarter, Indiegogo and RocketHub have for years helped entrepreneurs start or expand businesses. Now, people increasingly are using similar sites and social media to raise money for personal wants and needs.

 

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How Crowdfunding’s Secondary Market May Evolve

One of the interesting points that emerged from last week’s Sunshine Act meeting of the SEC Advisory Committee on Small and Emerging Companies was the following recommendation:

The U.S. Securities and Exchange Commission should facilitate and encourage the creation of a separate U.S. equity market or markets for small and emerging companies, in which investor participation would be limited to sophisticated investors, and small and emerging companies would be subject to a regulatory regime strict enough to protect such investors but flexible enough to accommodate innovation and growth by such companies.

In referencing “sophisticated investors,” the SEC is specifically referencing accredited investors. The SEC cannot make an exchange, but this recommendation suggests a willingness to help solve a big problem for small business. Small business equity is illiquid, and this fact hinders economic growth.

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