This November the House of Representatives passed HR 2930 (the “Entrepreneur Access to Capital Act,” a bill that allows startups the ability to utilize crowdfunding in order to source capital). This bill marks a new era for crowdfunding in which startups can offer securities through social mediums in order to grow their businesses.
The bill, of course, isn’t law yet. The Senate also introduced a bill in November that basically shares the same goals as HR 2930 with a few distinctions (including investment minimums and maximums, funding caps, and the Senate bill requires the use of an intermediary like Kickstarter to process the investments, among other things). However, the bill was read twice in December and is currently being referred to the Committee on Banking, Housing, and Urban Affairs. If it passes, it will be reconciled with the House and then referred to the White House. So it still has a ways to go. Scott Edward Walker wrote a very helpful article on what small businesses need to know about the House bill.
The bills couldn’t be more well-timed, however. If you’ve given to Kickstarter in the past year, you received an update from them this week about their year in summary. And it was a big one. All told, Kickstarter alone saw more than $99 million pledged in the past year (and Kickstarter is still less than three years old). In the past year, 65 crowdfunding platforms were launched around the world (80% of which are focused on creative or artistic projects). With these bills in the house, I’m sure that these numbers have nowhere to go but up, across all industries. Just before the year ended the TikTok project raised more than $942,000 for their project alone.
There are a number of tips to follow on how to succeed when sourcing funds through platforms like Kickstarter? What do you think some of the key elements are of a successful crowdfunding campaign? How do you think things will things change if the crowdfunding bill is put into law?