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A Contrarian or Realistic View of Crowdfunding? What do You Think?

Joel Block and I have been connected on LinkedIn for quite some time and it was good to finally catch up with him at the IMN Crowdfunding Conference in Santa Monica, California.

Joel, rather than jumping on the crowdfunding bandwagon, gives, what I call a “contrarian” view of equity crowdfunding and what he refers to as a “realistic” view.

I know, I sound and look annoyed at Joel in the video, but that couldn’t be the furthest thing from the truth. Actually, since Joel and I have been in discussions on LinkedIn, I think we felt very comfortable with each other and I felt that I could be my friendly, sarcastic self. It is really an, evident, attitude of endearment.

Joel has been around a while and has, what some would refer to as, a healthy amount of cynicism. He asserts that many of those on the crowdfunding bandwagon have a self-serving agenda. The key word is “some” and while I have run into some people involved in crowdfunding, who seem like hucksters, I have found many touting crowdfunding as genuine and forward thinking.

Clearly, when you open the door to expand the investment universe to include more planets and people, you will also include, those that don’t belong, both from the investor and sponsor sides.

Joel believes that crowdfunding is not an industry. He believes that it is a “subset, a little technique……. inside of the fundraising business, the money business. We’re dealing in the securities arena and crowdfunding is a new way of meeting investors and generating leads.” To Joel, it is a lead generating mechanism. It may help facilitate transactions better, but he does not believe that it is going to fundamentally change things.

Do you believe that people have false expectations of crowdfunding? Leave a comment below

Something to Add?

  • Ken Rhinehart

    I totally agree with Mr. Block. Crowdfunding, while the potential is enormous, is still a technique for fundraising. Buying real estate is not like buying a stock where it really doesn’t matter which broker you use. People with a lot of money are going to invest with people they know, like and trust. Crowdfunding may open doors that may otherwise never been opened, but it still comes down to the fundamentals of the real estate and the person putting the deal together.