by: Markus Lampinen
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Recently a lot of talk about the upcoming regulatory shift has emerged and with it speculation on how it will affect the landscape. Specifically for online funding platforms it will undoubtedly validate the direction and speed up the development.

In a recent article on this matter in Businessweek, the author Scott Shane writes:

The SEC should change its rules to permit entrepreneurs to use crowdfunding to sell equity. The risk would be no greater to investors than that posed by accepted online lending models.

However you spin the subject, the opinions seem to be shifting toward realizing the scope and potential impact of crowdfunding and crowdsourcing, and creating supporting regulation to cater for the modern days challenges and opportunities. No system is naturally perfect, but with transparent and efficient tools it can be made into a purposeful process.

If we speculate on the assumption that the direction of regulatory bodies is toward an exemption for startup fund-raising, as it has been signaled, one could ask what will be the effect and its immediate impact on the market?

The mainstream inception of this field as we know it, is still be ahead of us. How far ahead, is another question. In any field as a disruptive organization, being ahead of the large market is a good thing, yet it begs certain caution and persistence in the operations, to sustain the long-haul. As the regulators confirm the market, it will undoubtedly lead to an pickup in the field.

Even in the past year, there has been an increased amount of new actors entering the market. Competition breeds innovation, right? The field of startup funding is a large one and it does require a community effort for it to be successful. Therefore there is enough room for all the actors that wish to shape it, to produce value for the startup companies and investors alike. As long as everyone is in it for the right reasons, the development will create even more value.

As a result there will be many even more innovative models, for empowering the early stage of startup investing, but also complementing and building bridges to other actors interested in startup companies as a diversification of their portfolios. The financial sector is in reform and the scope of its hindrances will lead to innovation in their solutions. Simplifying the early stage startup investments will undoubtedly lead to a spill over effect, much larger than we can even anticipate.

One could set up a poll, of when the regulatory changes would emerge. What would be your best guess?

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About the author

Markus Lampinen Passionate, driven entrepreneur. CEO at Crowd Valley, the crowd funding infrastructure, Senior Partner at the Grow VC Group. Markus has also worked with actors in both the private and public sector, to improve the infrastructure for entrepreneurship and serves as a frequent public speaker on related themes. Follow Markus on Twitter, LinkedIn & Google

This entry was posted on Wednesday, May 4th, 2011 at 10:45 am and is filed under Online Startup Business. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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