It was buried in the New York Times and absent from the Financial Times, but today the official JOBS Act went into effect–expanding crowd funding from a niche to a platform scaler of creativity. This is a very big deal. I repeat–this is a very big deal. With Kickstarter and Indiegogo, we can act as patrons, participate in creativity and get a “thingie,” a product in return. With the JOBS Act, we can put our money into something and get a monetary return on it, not just a product. This allows all of us to be venture capitalists.
I call this Indie Capitalism and it amounts to the resocialization of capitalism. We have been living in Financial Capitalism for the past 20 years, where the economic system was all about market transactions for money. Financial Capitalism made nearly all of us consumerists–we simply bought stuff on the market and defined our lives, our status, out culture by what we consumed and money.
Indie Capitalism, Kickstarter and crowdfunding will change us into Makers and Participants in a different sort of system, an Engagement Economy. We can all be investors, creators, participators and consumers at the same time. We can take the power away from distant finance people and claim it as our own.
The JOBS Act was delayed by a year by government regulators afraid of fraud in crowd funding. They worried that naive people would invest in bad or phony businesses. Given the fraud of the prevailing Finance Economy by the banks, ratings companies and investment bankers that brought on the Great Recession, this concern is laughable while laudable. Banks had to pay fines for their dastardly deeds, but were allowed to deny any guilt. CEOs received bonuses, not prison sentences. Let’s hope the regulation for crowd funding is better.
For real coverage of crowd funding, check out Amy Cortese.
Amy’s book, Locavesting, is the best analysis around of this new–and hopefully better- form of capitalism.