SAN MATEO – People’s hunger for information about equity-based crowdfunding remains unabated.
This strong appetite was again demonstrated Friday when a crowdfunding conference in San Mateo overflowed with more than 150 people, who wanted to know how Americans will pool a few dollars to create big cash to help small businesses.
“We had to turn people away,” said Sara Rauchwerger, who helped organize the sold-out event at Draper University of Heroes.
The ins-and-outs of crowdfunding were addressed by Tim Draper, the Silicon Valley titan who launched the university in San Mateo this spring and by noted entrepreneurs who served on two panels – one of which oversaw a mock crowdfunding contest.
Much information was disseminated, but the fact remains that no is sure how crowdfunding will function until the Securities and Exchange Commission releases rules for it.
That didn’t deter people like Will Dailey from attending on May 31.
“I’m here to learn,” said Dailey, technology manager for San Francisco-based EFactor, which calls itself the world’s largest niche entrepreneurial network.
Dailey, who sat in the third row, said, “A friend who is an insider in Silicon Valley told me that it would be good for me to be here.”
Also on hand was McKenna W., 24, a Draper University student who declined to give her full name because she’s cautious about putting her moniker on the Internet.
“Anytime you can listen to someone like Tim on their investing advice, it’s a wonderful thing,” she said, referring to Draper, founder of the global venture capital firm Draper Fisher Jurvetson. “One of the bad things about crowdfunding is that … crowdfunders don’t have Tim’s expertise. They don’t have that access.”
At one point, Draper criticized the SEC for not moving faster to write the rules for Internet platforms that will serve as intermediaries between small businesses/start-ups seeking financial help and investors who will get equity shares.
“The SEC hasn’t gotten their act together yet,” Draper said. “I’ve had so much fun being a venture capitalist that I’ve always believed that everyone should be able to invest in these little companies and hope that they grow.
“Let it happen,” he said.
After the conference, EFactor’s Dailey said he was convinced of crowdfunding’s potential.
“More wealth will be created in the next 20 years than in all of human history,” Dailey said. “Most of this will be created by entrepreneurs, and crowdfunding will play a significant role.”
And just how much wealth will be generated?
“Multiple trillions of dollars worldwide. You watch,” Dailey said.
Equity-based crowdfunding was built into the bipartisan JobsAct signed into law by President Barack Obama on April 5, 2012. The rules had been expected by the end of last year; a recent change in the SEC’s leadership is believed to be one reason they haven’t come out. SEC officials have also said they want the rules to be “the right ones,” to help combat fraud against unsophisticated first-time investors.
Friday’s conference was sponsored by the Chamber of Commerce International Consortium for Entrepreneurs, a Silicon Valley business organization. Other sponsors included TechLAB Innovation Center and Fandrop.
Draper University will hold its first graduation this week. The university’s eight-week curriculum has given its inaugural class of about 40 students guidance to pursue their dreams of big-time success in the business world.