The growing popularity of crowd-funding has led to new regulation in the US – and the IR industry should take note of these trends…
Crowd-funding is yet to really take off in Australia (although it is surely just a matter of time), but it is all the rage overseas, especially in the US. The likes of Kickstarter are helping start-ups ranging from the creative to the practical secure investment funding to get projects up and running.
At first glance, crowd-funding may seem the antithesis of established, regulated investment practices and traditional methods of investor relations communication. Crowd-funding relies almost exclusively on social media to spread the word, which to the eyes of traditionalists makes the whole concept of crowd-funding seem amateurish and even cheap.
However, as the Interactive Investor Survey shows <>, social media is increasingly the preferred means of communication and information dissemination for the next generation of investors, meaning the IR industry has to start utilising it – like it or not.
Moreover, the growth of crowd-funding and its appeal to start-ups and investors alike has prompted the US government to legislate specifically for it and, according to Business Insider, the ‘biggest beneficiary’ could be the investor relations industry.