#CRACKtheCROWD: Richard Swart Interview: Global Impact, Culture, and Corruption in Crowdfunding
Welcome to Crack The Crowd!
In this episode we talk to Richard Swart, PHD Crowdfunding researcher, Author, Speaker, Investor, Advisor and one of the most prominent minds in crowdfunding. He’s at the center of the global talking to governments and all things crowdfunding.
More: Richard Swart is Crowdfunding and Alternative Finance Researcher and Scholar-in-Residence in the Institute for Business and Social Impact at the University of California, Berkeley, researching crowdfunding, crowdsourcing and alternative finance. Swart organizes the Annual Academic Symposium in Crowdfunding Research, which is globally recognized as the leading event in crowdfunding research and policy, which has brought eminent faculty, government officials and policy makers from over 30 nations to UC Berkeley.
Recognized as one of the top thought leaders in crowdfunding and alternative finance, with particular interest in its impact on social innovation and global challenges. He has been the subject in leading business publications including Forbes, Inc, Entrepreneur, VentureBeat, Wall Street Journal, New York Times, BBC, PBS, MSNBC, NPR, Financial Times, Washington Post and dozens of others. Coauthor of the forthcoming book Crowdfunding: the Corporate Era, discussing how corporations leverage crowdfunding as an essential tool for driving innovative ways to strengthen their brand experience, deepen their impact in the community and improve sales. Current projects include:
National, Regional and International Studies of Alternative Finance Markets
Crowdfunding, Crowdsourcing and Open Innovation
Developing a Development Finance Model for Alternative Finance
Studying how NGOs and Organizations can empower projects with crowdfunding
University Crowdfunding Consulting
Advising professional investors, funds, and other consulting firms on market developments and investment strategy
Swart has a strong interest in the international expansion of crowdfunding. As such, he was the lead author of a major research paper for the World Bank on the potential impact of crowdfunding around the globe. Board member or strategic advisor to several firms, mostly in crowdfunding, fintech, and social entrepreneurship.
In this interview, we discuss the state of the last two years of crowdfunding, how to the difference between US, South American, Chinese, and European crowdfunding markets, & corruption.
This is Only Part 1, so stick around for the next episode to learn more abou Galvin vs the SEC, the growth of Title II and Title iV, and the needs in the Jobs Act 2.0, how to attract and approach accredited investors and what really matters.
For the longer, main audio discussion, you can:
Selected Links People and Organizations Mentioned in this Episode From This Episode
World Bank Report: Crowdfunding’s Potential for the Developing World
[2:37] Scaling Innovation & The World Bank Report for Crowdfunding Potand the
[3:35] Global use and growth is several hundred percent
[4:00] The category Breakdown & Donations backstory of indiegogo
[5:00] The Kickstarter and Indiegogo Dominate Rewards / perks
[5:25] Kickstarter and Indiegogo Growth Rates Plateau in U.S.
[6:30] Indiegogo’s differentiation internationally with broader categories and payment gateways
[7:00] The Costs in Crowdfunding are even higher internationally
[7:15] Due to costs, without massive scale most crowdfunding portals are not yet profitable. Rockethub and others with different business models beyond Rev Share
[8:20] Dealing with manufacturing, fulfillment, and scale is one of the biggest challenges
[9:30] Large tech giants are entering the space [7:30]
[10:30] The South American crowdfunding landscape is largely creative: artists, musicians,
[10:50] Asia crowdfunding landscape is debt, Chinese Peer Lending Platforms officially estimated an $12B may actually be $50B
[12:00] What’s driving debt in China? Fewer banking options + mistrust in state sponsored options
The cultural phenomena of Social funding of innovation in India and China
[12:50] Chinese consumers are looking for returns without State run watching, 9000 unlicensed platforms in China
[14:45] Middle East and Africa haven’t grown due the deep pockets of kicking off a new category
[14:20] Countries are adapting to crowdfunding and the local resources East Africa doesn't have PCs, and uses mobile to mobile payment methods instead
Egypt has a huge cultural issue with most online fundraising being fraud. Cultural barriers have slowed growth
[17:18] Large scale equity finance in Europe is growing but legislation in the US is stifled
[18:00] UK is 5% of US economy and doing 10 times more crowdfunding than the US.
[17:40] The EU legislative landscape
[19:00] Southern EU & Italy is creating a liberal crowdfunding environment to stimulate economic growth and are pushing the digital economy
[20:00] The UK crowdfunding environment has been generally more hands off and grown well organically
[20:30] Appearance and reality of fraud in EU countries is low. Those getting to prosecutions is four cases.
[21:00] Ethan Mollic’s reasearch estimates .1% apparent intention to commit fraud.
#CRACKtheCROWD is a long-form conversation about the dynamics and people in crowdfunding hosted by Entrepreneur, Strategic Advisor, and Innovation Strategist Dan Baird.
