The public future of private investing

Thursday last on this blog I tried (again) to speak to how investment crowdfunding is blooming, even if within the walled garden of angel investing. Outside the walls, advocates of crowdfunding for everyone wait in vain for rules that will not deliver anything like the platforms angels enjoy.

Thursday's post is the text of my remarks as part of Dan Rosen's public policy panel at the 2013 Angel Capital Association Northwest Regional Meeting. To make the point on this occasion, I contrasted the very different approaches Congress took in the JOBS Act to crowdfunding among angels, on the one hand, and crowdfunding for everyone else, on the other.

Will-Success-500-Well, yesterday I saw a post on Yahoo Finance by Joe Bartlett, the Chair of the Advisory Council to the ACA (of which advisory body I am also a member), and I have to recommend it as required reading for anyone interested in the crowdfundification of angel investing.

Joe sees the future in widescreen CinemaScope. In front of Joe's lens, the theme is big, the forces are primal and the shocks ahead are tectonic.

Here is a liberally extended excerpt (I don't think Joe will mind):

"The home page of the Super Platforms will continue to attract attention with descriptions of completed deals. The Super Platforms will be openly snooty on both the buy and sell side, seeking the best investor census: only the highly-qualified need apply. By the same token without pretending to provide investment advice or to go beyond basic due diligence, the Platform sponsors will exercise discretion as to who and what is invited to post their information, together with quite detailed requirements on what needs to be made available to investors.

"The plethora of Platforms will result in a selection process in which Platforms which prosper (as, e.g., AngelList has) will be 'rated' by tracking technologies using tech-aided systems approaches to separating the good from the bad and the ugly. One such rating protocol will likely use the Amazon/Zagat methodology by collecting and publishing anecdotes from investors and issuers who have done business with the Platform and formed an opinion of the Platform’s expertise, performance and the ultimate results.

"Since the plural of anecdote is data, that methodology for indexing Platform quality will be available to subscribers or, indeed, online. Platforms, as they do now, will advertise their own track records -- their deal numbers and amounts, including specific emphasis -- data that is again checkable by social media conversations."

Go read it if you haven't already. This post will prove a touchstone.

Still from "Will Success Spoil Rock Hunter."

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