Below is an article by Wired Innovation Insights entitled "Game-Changing Technologies Improving Crowdfunding".
Game-Changing Technologies Improving Crowdfunding
By: Judd Hollas, Wired Innovation Insights Contributor
September 24, 2013
As the JOBS Act becomes more prominent in the capital markets, several crowdfunding companies are implementing newly developed technologies to enable entrepreneurs and investors to achieve precise analytics, verifiable compliance with new regulations, and reliable fraud detection. Many experts have predicted that the crowdfunding industry is at the verge of rapid expansion—and these new technologies will become vital to entrepreneurs and investors as time progresses. What follows is a brief description of new software developed by three leading technology companies in the industry: Crowdbouncer, Early IQ, and EquityNet.
Crowdbouncer – Compliance Solutions
Crowdbouncer offers technology that provides a fully automated and universal regulatory compliance solution for the crowdfunding industry. Its CrowdSIP™ software acts independently of crowdfunding portals, issuers and other intermediaries to identify parties that are compliant with regulations associated with the JOBS Act. With Crowdbouncer, transactions conducted between entrepreneurs and investors are not hindered by the requirement to visit another accreditation site outside of their crowdfunding portals. Its software can be integrated into their customers’ portals so the end users’ experience is highly customizable. CrowdSIP™ is a free service offered by the Crowdbouncer API. The company’s founders realized early on the implications and potential liabilities that would arise from Titles II and III of the JOBS Act, and that all parties involved in the crowdfunding marketplace would require such a service.
Early IQ – Investor Protection
Early IQ focuses their software on transparency between investors and companies searching for early-stage funding. One of the company’s main goals is to prevent investors from becoming victims of fraud, which is accomplished through its TQScore™ software. TQScore™ lets investors view an all-inclusive report on companies with potential investment opportunities. Investors have access to important data such as a company’s filing status and corporate formation, backgrounds and identity verification of the company’s management team, and corporate civil proceedings. This software simplifies the performance of due diligence that all investors must carry out. Companies benefit from the use of this software because it demonstrates trust and confidence to investors; therefore, those companies are more likely to receive funding.
EquityNet – Investment Screening
Founded in 2005, EquityNet has created patented analytical technology that provides campaign and communications abilities for entrepreneurs and the sophisticated screening technology for investors. Entrepreneurs have the ability to create private and public business profiles that can be shared with investors and social networks, respectively. It also has access to business planning software and analysis reports, as well as access to a funding network of thousands of investors and an integrated messaging system. Investors have the ability to screen thousands of businesses through several factors including the business’s industry, location, risk, and EquityNet’s patented 5-Star Rating. Investors can then review a summary profile for any business of their choosing or conduct further due diligence with EquityNet’s Standardized Business Plan Analysis™ report. The crowdfunding industry is certainly seeing a proliferation of niche and general investment platforms and third-party providers. What the long-term trajectory of the industry will be is difficult to know until the SEC finally implements Title III (i.e., unaccredited investor) crowdfunding regulations. However, this week's lifting of the ban on general solicitation of accredited investors is certainly a step in the right direction -- and may help get capital flowing to the largely ignored non-tech startups that need capital to thrive.
Judd Hollas is the founder and CEO of leading investment platform EquityNet.