Steve Case: Crowdfunding Will Augment - Not Replace - Venture Capital
Steve Case, co-founder of AOL and Startup America chairman, at the South By Southwest festival in Austin on this issue:
J.J. Colao, FORBES:
... some speculate that the introduction of equity-based crowdfunding will put pressure on venture capital as an asset class. Fred Wilson of Union Square Ventures has publicly warned about the torrent of money crowdfunding might unleash, a torrent that could elbow out venture capitalists. Steve Case doesn’t appear worried. “My view is it will help entrepreneurs get going,” he says. “Some of those companies, after they raise a few hundred thousand dollars through crowdfunding, might need a few million dollars and will turn to venture capitalists.” He admits the trend may put pressure on “some” VC firms. My view is that top tier firms will remain insulated from the trend—just as top-tier universities will likely survive the rise of the digital universities like Coursera and 2U—while those without cachet will struggle for deals.
J.J. Colao's Bio:
I cover entrepreneurs, people who create value (and
make money) out of the ideas in their heads. In the age of "The Social
Network" myth, I get a kick out of delving into the reality of launching a
business. Before joining Forbes I spent a year toiling in startup obscurity at
Squidjob.com. Since my bedroom was the office, I never had to sleep under my
desk. Before that I traveled through SE Asia and India, appearing in a
Bollywood music video and trekking through the Himalayas along the way. Comments,
tips and forceful criticism are appreciated.
