White House Declares “Crowdfunding Offers Tremendous Promise”
Washington, DC. June 28, 2012. “Crowdfunding offers tremendous promise,” posted Doug Rand, Senior Policy Advisor in the White House Office of Science and Technology Policy. In a White House blog posting on June 28, 2012, Rand added that “some believe that it has the potential to revitalize underserved communities by improving access to capital for small businesses.”
One of the key features of the JOBS Act is to enable “crowdfunding” – letting companies raise up to $1 million in small increments from many investors. Rand’s comments restated President Obama’s enthusiasm for the JOBS Act, calling it “a potential game changer”:
“Right now, you can only turn to a limited group of investors — including banks and wealthy individuals — to get funding,” the President said. Laws that are nearly eight decades old make it impossible for others to invest. But a lot has changed in 80 years, and it’s time our laws did as well. Because of this bill, start-ups and small business will now have access to a big, new pool of potential investors — namely, the American people. For the first time, ordinary Americans will be able to go online and invest in entrepreneurs that they believe in.”
In many ways, Rand said, nonprofits and social enterprises are already adept at raising money through crowdfunding – think of donation-based tools like Network for Good or zero-interest microfinance platforms like Kiva. What the JOBS Act will do is allow micro-investors to purchase a stake in the venture.