Thread by @dunkhippo33

Happy Monday! - today marks a point in history for crowdfunding. You can now raise up to $5m in the US as of today via crowdfunding.

Today's thread is about crowdfunding -- where do I think it's going? What does the future of fundraising look like?

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1) But let's first take a step back.

When you're building a co and you're looking to bring in a co-founder or employees or contractors, you're looking for a team of ppl who can help you advance the co the most.

2) Ppl don't normally think about it this way, but what you look for in investors is identical. Instead of trading time equity, investors trading money for your company's equity.

But money in itself is a commodity. One person's money is the same as anyone else's.

3) This is why VCs go around saying they are "value-add" -- so that you will pick their money over other investors.

Historically, the best investors have helped you with M&A, partnerships, and hiring.

Newer operator investors help you w/ product, customer acquisition, etc too

4) But, most traditional investors have a limited network and set of skills because they are rooted in their own profession.

Enter crowdfunding. Imagine raising money from ppl who are your customers? Ppl who directly move the needle for your company. Or ppl in your industry.

5) With crowdfunding, you can raise money from a whole swath of people who are "value-add". And value-add in many different ways.

This is where I see the promise of crowdfunding.

6) With the limitations on how much you can raise opening up to $5m today, this enables much larger raises that can really move the needle for startups.

7) In today's version of crowdfunding, you don't really get to pick the investors.

But what if you could also have investors pitch YOU as a founder as to why YOU should accept an investor into YOUR company?

8) For example, @gumroad will most likely hit $5m (they are already at $3.2m at the time of this writing just a few hours in).

They will be oversubscribed. Why can't they cherry pick investors? -- their best customers, ppl who could potentially work at Gumroad, partners etc.

9) 1 step further. Why do all investors get the same terms? If you can offer a valuable distribution partnership to Gumroad, shouldn't you get better terms?

Just like how employees do not get the same amnt of stock for the same time spent, investors are not all the same either.

10) Last wk @pipe announced their funding round where investors can put in bids on revenue streams.

Similarly, you can envision a world where investors can put in bids for equity in startups in a platform. What can these ppl bring to the table? For how much? What terms? etc.

11) Now technology exists to create investment platforms like these, it seems like investing should be more like an online financial marketplace rather than driving up and down Sand Hill pitching boutique businesses.

12) There are certainly many issues that still need to be resolved -- such as how does a non-professional investor know what to invest in?

You can imagine influencers and sherpas with an audience replacing the concept of a VC fund.

13) This looks a bit like Angellist Syndicates but more accessible and more ways for the ppl inside the syndicates to get involved.

14) And there's the issue for startups of how to get momentum going for a campaign in the first place?

How do you get one of those influencers behind you in a scalable way?

15) So you can see how this world is a lot more efficient for all parties, provides higher value investors in rounds for startups on the whole, and also enables more personalized deals for both the founder and investor.

The best is yet to come.