Last week entrepreneurs, investors, and industry leaders gathered at the CrowdCon Grand Rapids intrastate investment crowdfunding conference. The event sought to explore the nuances of the newly minted Michigan Invests Locally Exemption (MILE) Act and the future of investment crowdfunding in Michigan, while bringing key parties to the table.
“What I heard buzzing around is this intermingling of different perspectives on crowdfunding,” says Felipe Ballesteros, Marketing and Communications Manager at GR Current, CrowdCon GR’s host organization. “You have investors talking to people who are starting their business at the same table with lawyers talking about legality. So we have a microcosm over coffee.”
The conference was charged with an endless energy and enthusiasm as participants discussed crowdfunding. Topics of conversation varied widely but there was an undercurrent of excitement as experts in intrastate crowdfunding discussed the emergence of a new class of community minded investors eager to fund businesses and projects in their local communities.
“In the last 34 years capital started to shift significantly out of our communities. [Crowdfunding] is moving this capital back into our communities,” says Angela Barbash, Principle of Reconsider, an Ypsilanti based firm focused on merging community investing with social enterprise.
Barbash estimates that there is approximately 30 trillion dollars in long term wealth in the United States with less than 1 percent of that wealth invested into local economies. The rest of that money, ripe for capital investment, is dumped into a global market dominated by automated high frequency trading.
“There are some really weird dynamics that did not exist in financial markets a decade or fifteen years ago,” says Barbash. “That is changing what people are choosing to do with their capital and it is also creating a huge renaissance in entrepreneurship for people that really can’t find the opportunities they are looking for.”
Beyond individual localities, Barbash suggested that we are in the midst of an emerging market focused on community driven investment on a broad scale. According to her, this could lead to reinvigorating the community investment space with regional capital markets and exchanges focused solely on trading local stock.
Despite the opportunities available through the MILE Act, experts like Barbash highlight the importance of education for both investors and entrepreneurs.
“The biggest single piece of misunderstanding we see in the market place with entrepreneurs is different sources of capital and how those sources are going to change the conversation,” says Barbash.
As crowdfunding legislation continues to shake out, details surrounding unanswered questions regarding the use of social media and the unique position of nonprofit organizations will develop. But, even while there are many questions left unanswered, it is certain that the entrepreneurial spirit will drive crowdfunding to its full potential.