Your Mark On The World, but it is written in the same spirit. I’ve studied a dozens of successful crowdfunding campaigns, interviewing the people behind them to learn their secrets for success. Devin's Book, Your Mark on the World, was downloaded over 75,000 times and reached the #19 spot on Amazon's free book list--among all free books. It remains on the top 50 free nonfiction books at Amazon.
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Crowdfunding Is About Creating Jobs For The Right People
This article appeared on Forbes.com on February 20, 2013. It is included in Crowdfunding for Social Good by Devin Thorpe and is reprinted here as an excerpt from the book.
Crowdfunding is not just about creating jobs, it is about creating jobs for the right people. In April of 2012, President Obama signed the JOBS Act into law, authorizing crowdfunding of equity and debt for the sake of creating jobs. The more time I spend studying crowdfunding and working with the leaders in the crowdfund community, the clearer it becomes that not only will crowdfunding create jobs, it will create jobs in the right places.
Candace Klein speaking at the National Press Club
Recently, I sat down in a hidden valley near Park City, Utah with Candace Klein, CEO of Somolend and founder of the nonprofit Bad Girl Ventures, who explained that overwhelmingly, the people were polled about crowdfunding indicating a desire to raise capital are women, African Americans and Hispanic Americans. In other words, crowdfunded capital will flow to entrepreneurs in the communities that have been most disadvantaged in America.
According to Klein, women own over 50 percent of the businesses in the United States but receive less than 5 percent of “traditional capital” and less than 3 percent of venture capital. Klein notes that she founded Bad Girl Ventures specifically to address this problem. BGV has funded 45 women-owned businesses with a total of $5 million, but also had to turn away thousands of women. This inspired Klein to launch Somolend so that she could provide capital to thousands of women owned businesses. This also allows “women investors to build their own wealth,” she notes.
Furthermore, according to Klein, Somolend is already doing lending, matching both banks and individuals to small borrowers, 40 percent of whom are nonprofits. The pricing for debt is set on an individual basis between the borrower and lender. The rates range between 3 and 22 percent. Multiple lenders may participate in the same loan to one borrower at different rates. The borrowers send the payment to Somolend, which then remits the corresponding payments to each of the borrowers.
Klein’s Somolend exemplifies the potential of crowdfunding to allocate capital more efficiently to the very people who are locked out of current capital markets, creating jobs in communities that have not been participating in the growth of the U.S. economy since 2000. In addition, the capital being allocated to nonprofits expands the good they can do.
Yesterday, I reconnected with Candace in Washington, DC. She joined her peers from the Crowdfund Intermediary Regulatory Advocates to lobby for implementation of crowdfunding anticipated in the 2012 law—which still awaits SEC and FINRA regulations. Rumors are rampant that the draft regulations are ready—and have been for months—but that the politics of the appointment of the new head of the SEC has led to a delay in issuing the regulations for comment.
Jason Best with Sherwood Neiss at the National Press Club
Jason Best and Sherwood Niess, of Crowdfund Capital Advisors, who led the lobbying effort for the JOBS Act and were recognized by President Obama in the Rose Garden ceremony last year, were there to lead the effort to call for action from the SEC. They were joined by their partner, Judy Robinette; Vincent Molinari, CEO of GATE Technologies; Karen Kerrigan, CEO of the Small Business and Entrepreneurship Council; Doug Ellenoff, partner at Ellenoff, Grossman and Schole; Sara Hanks, CEO of Crowd Check; Kim Wales, CEO of Wales Capital, Chance Barnett, CEO of Crowdfunder; Chris Tyrell, Principal of Nehemiah Investments, Ryan Feit, CEO of Seed Invest and, of course, Klein, who helped draft the JOBS Act.
The group met with congressional staff on Capitol Hill and later met with a coterie of senior staff and Senators in the White House to press the issue.
Some notable remarks from the group include:
Judy Robinett presenting at the National Press Club
Robinette said, “Crowdfunding is not just an economic issue, it is a women's issue. It is also an African American issue. In fact, crowdfunding represents the greatest democratization of small business capital in history. While venture capital is allocated almost exclusively to businesses owned by men, crowdfunding is already being allocated in nearly perfect proportion to the composition of our population.”
Neiss said, “In the 320 days since the President signed the JOBS Act into law a vibrant crowdfunding industry has formed to live up to the promise of Title III - access to capital with prudent investor protections. We are here today to showcase for Washington how we are ready to embark on Web 3.0, where social media meets community financing. We hope the demonstration of this robust trade association will give the SEC the confidence it needs to release the proposed rules so America's Job creators can get the capital they need to innovate and grow."
Kerrigan said, “The capital needs of entrepreneurs remain just as critical as when the JOBS Act was signed last April. The build out and investment that has gone into creating an efficient, transparent and accessible marketplace for small businesses to find needed capital and protect investors is extraordinary. Now, the SEC must take the next step and finalize its rulemakings so the JOBS Act can fulfill its promise of helping fund promising businesses, creating jobs and bringing the economy back to robust levels of growth.”
Ryan Feit presenting at the National Press Club
Feit said, “I am excited to demo SeedInvest's crowdfunding platform on Capitol Hill in order illustrate the massive potential the JOBS Act has to transform early-stage financing. We need to ensure that lawmakers are proud of the burgeoning industry they spawned and that they do not lose sight of how crucial crowdfunding is for startups and small businesses.”
Best and Niess, for their part, are taking their show on the road. They are traveling the world helping other countries to implement reasoned laws for doing crowdfunding. Of course, Australia and the UK, among a handful of countries, have already implemented crowdfunding, allow the U.S. to analyze their experiences to determine best practices.
If you would like to get involved with advocating for the crowdfunding industry, please join the Crowdfunding Professional Association.
About Devin:Devin D. Thorpe thinks he is the luckiest person alive. After being “let go” from the best job he’d ever had—as the Chief Financial Officer of the multinational food and beverage company MonaVie—he and his wife ended up living in China for a year where he wrote Your Mark On The World and embarked on the career he’d always wanted yet hadn’t dared dream. Now, as an author, a popular guest speaker and Forbes contributor, Devin is devoted full time to championing social good. His current life isn’t much like his past. As an entrepreneur, Devin ran—at separate times—a boutique investment banking firm and a small mortgage company. He served as the Treasurer for the multinational vitamin manufacturer USANA Health Sciences years before becoming CFO for MonaVie. Over his career he led or advised on the successful completion of $500 million in transactions. Devin squeezed in two brief stints in government, including two years working for Jake Garn on the U.S. Senate Banking Committee Staff and another year working for an independent state agency called USTAR, where he helped foster technology entrepreneurship during Governor Jon Huntsman’s administration. Devin is proud to have graduated from the University of Utah David Eccles School of Business, which recognized him as a Distinguished Alum in 2006. He also earned an MBA at Cornell University where he ran the student newspaper, Cornell Business. Today, Devin channels the idealism of his youth with the loving support of his wife, Gail. Their son Dayton is a PhD candidate in Physics at UC Berkeley (and Devin rarely misses an opportunity to mention that).
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"Living at the Whitehead's Zoo has not received any compensation for this post other than a complimentary copy of the book for reviewing purposes. "