Social Nature Of Crowdfunding Should Control Fraud
Crowdfunding has
the potential to revolutionize how small businesses raise capital, but it
generates an old worry: the possibility for fraud. But crowdfunding
advocates say not to worry. The public nature of the investing model should
help investors quickly identify and put a stop to bad behavior. The social networking aspects of crowdfunding portals
enable legitimate investors and startup companies seeking capital to identify
players who aren’t playing it straight. They then can quickly isolate and
report anyone involved in fraud, crowdfunding experts say.
There is a level of transparency there that hasn’t existed before,
said Mike Morin, who leads portfolio relations for the $15
million Start Garden fund that uses public participation in
its investment decisions.
Somebody may get away with ripping somebody off once, but they won’t get away with it twice.
Speaking in a panel discussion at a recent Association
for Corporate Growth Western Michigan Chapter event, Morin argued that
transparency could have a greater impact than regulations in weeding out fraud. While Start Garden is not involved in crowdfunding, it
does use social and public components in investment decisions. Anyone who
receives an initial $5,000 investment also must return regularly and provide an
update on their progress to receive additional funding. View The Full Story
Keine Kommentare:
Kommentar veröffentlichen