After initial rejection from Hollywood studios, the creators of canceled TV-show ‘Veronica Mars’ turned to Kickstarter to fund a film version.
Crowdfunding for equity is a hot topic right now. Much of the discussion centers around the JOBS Act, which is currently under deliberation by the U.S. Securities and Exchange Commission (SEC). Across the pond, however, equity-based crowdfunding has already taken off.
Last week, we spoke with Alysia Wanczyk, marketing director for the U.K.-based crowdfunding platform Seedrs, to learn about the company’s progress and plans for the future. The first part of that discussion is available below; part two will be live on Crowdsourcing.org later this week.
Eric Blattberg, Crowdsourcing.org: Could you provide a brief introduction to the platform for our readers?
Alysia Wanczyk, Seedrs: Seedrs started in 2009. Our cofounders met while studying at Oxford in the UK. One is Jeff Lynn, our CEO. His background was in securities law, [first] in the U.S. and then in the U.K. And the other cofounder, Carlos Silva, was an ethical financial services hacker, so he’s very well versed on security and finance. It was really Carlos Silva’s idea to open up investing to the masses. So with his and Jeff’s background, they thought, “Actually, yeah, let’s give this a go.” So they started embarking on the Seedrs journey.
They spent about 18 months preparing for Financial Services Authority (FSA) authorization. They wanted to open up investing in private companies to the masses, and when you’re opening up securities, you need to be regulated. So they underwent that in 2009, and then once they submitted the application, it took another 13 months to receive authorization. So in May of 2012, we became the first crowdfunding platform in the world to receive regulatory approval. Essentially, in July of last year we launched to the UK, allowing anyone to invest as little as £10 pounds into the seed stage startups on our site, and allow those seed stage entrepreneurs to raise up to £150,000 pounds of capital from their friends, family, another independent investors.
Not to get too off track, but what does being an ‘ethical financial services hacker’ entail?
Well Carlos [Silva] tries not to talk too much about it, but essentially he found flaws in financial institutions’ websites and then let them know, so that he could set up meetings with them to fix them. So he didn’t do it for evil, he did it for good.
Well that’s good! (laughs) So what benefits does being FSA-certified offer Seedrs and its investors?
The authorization itself offers some credence and prestige to what we’re doing; it shows that we’re legitimate platform. We very much took the approach when launching that our main focus of driving growth was going to be investors, and so to build up the relationship of trust and credibility with them, we had to be authorized.
[The authorization] was very hard to get, but we’d very much love to see more and more platforms become authorized to really help develop the marketplace. And actually, while there’s so much going on in the U.S. with the JOBS Act, the U.K. is really forward thinking and ahead of the curve on equity crowdfunding. There’s us and there are a few other platforms coming up with FSA authorization, and we think that’s great for developing the marketplace. The securities regulations in the U.K. are flexible enough to make authorization easier than it is in the U.S.
FOR IMMEDIATE RELEASE
March 8, 2013 – Chicago, Illinois – K-HERO Clothing a Cancer awareness brand launched an Indiegogo.com crowdfunding campaign to raise funds to support it’s fight against Cancer. Indiegogo an industry-leading crowdfunding platform gives a unique opportunity to K-HERO to further it’s goals of; Increasing Cancer Awareness, and Funding Cancer Research. The campaign can be found at http://www.indiegogo.com/projects/the-k-hero-project-join-the-fight-against-cancer. Through this campaign K-HERO hope to increase it’s profile and it’s ability to help raise cancer awareness and fund cancer research.
“The more t-shirts K-HERO sells, the more money we can give to the people doing the most important research to cure cancer.” Said Brent Magnussen K-HERO founder “Wear a statement, and make a difference. Join the fight against cancer!”
With the funds raised K-HERO will update it’s eCommerce system and build a cutting edge interactive website, increase standing inventory and create new designs for men, women, and kids. These designs will be done by young hungry designers who are just starting out and have not had a chance to shine in the industry. K-HERO will give them that chance. K-HERO will offer new designs on t-shirts, hoodies, socks, hats, and other apparel by May of this year.
K-HERO also intends to purchase the necessary equipment to print it’s own shirts. As a company we want to give you the best product possible and by controlling every step in the t-shirt printing process we know you will be getting the highest quality apparel. This will save K-HERO money and increase the increase the funding we can contribute to the people doing the most advanced work in cancer research.
Tell your friends and co-workers about The K-HERO Project. Tell anyone you know that has been affected by cancer and make some noise about our campaign. Join the Fight, and help support K-HERO and the fight against cancer.!
ABOUT K-HERO CLOTHING COMPANY
K-HERO Clothing Company was inspired by Karen Magnussen who fought stage 4 cancer for 4 years. She was amazing and her fight inspired her son Brent to start K-HERO Clothing to continue her fight against cancer in the same way. Fearless, with a smile, positive, and never quitting… in 2009 after a courageous struggle Karen Magnussen lost her fight with cancer, but the memory of her struggle lives on in K-HERO Clothing .
Trina Spear, 29, graduated in 2011 with an MBA from an elite school and a hefty $170,000 in student loans. The debt was the reason she took a job in private equity rather than start her own company. “For someone coming out of Harvard Business School, people think you have every opportunity in the world to do everything you want in life,” she said. “[But] you really feel like you’re handcuffed and you have to go to the big corporate job.”
TRINA RAISED MONEY FROM INVESTORS IN EXCHANGE FOR EQUITY IN HERSELF
Two weeks ago, Spear moved to Los Angeles to join FIGS Scrubs, a startup she co-founded that’s attempting to freshen up the medical apparel industry. She was able to quit her big corporate job at Blackstone Group thanks to 13 strangers who invested $20,000 in her future in exchange for one percent of her pre-tax income over the next ten years. The money will cover her $1,500 monthly interest payment and hold her over as she raises $1 million in venture capital for her startup.
It’s called a human capital contract, in which an individual raises money from investors in exchange for equity in herself. The idea is a bit unsettling. It sounds like either a modern version of indentured servitude, or the early version of some dystopian future in which every person is valued in dollars. In the science fiction novel The Unincorporated Man, every human is incorporated and most don’t own a majority of themselves. Their shareholders are their parents, the government, schools, corporations, and investors who bought their equity on the secondary market.