This week StartWise met with Nigel Sharp, Global Entrepreneur-In-Residence at CU Boulder (a program sponsored by Brad Feld), Advisor at Boomtown Accelerator, Blackstone Entrepreneurs Network and Analyst at the Venture Capital Analytics program at Rockies Venture Club.
Nigel supports students, staff and faculty’s entrepreneurial efforts and the University’s business acceleration programs and classes, as well as helping to internationlize the Boulder startup ecosystem. In this interview we discussed equity crowdfunding and opportunities it could create.
Some of our favorite quotes from Nigel:
“Equity crowdfunding will make people money and even might create a new “gold rush.”
“The funding gap will remain – the innovation will keep happening regardless – if anything competition for money will increase.”
“[Crowdinvesting] might even become a new validation point – how big a crowd can you get behind your business.”
The full interview can be found below:
Some people in the startup community are talking about VC funding slowing down. Do you think that equity crowdfunding could help bridge the funding gap?
Nigel – We live in the world of innovation that is always adapting. Crowdfunding is changing the funding scene, initially with platforms like Kickstarter that allowed people to support innovation. New crowdfunding can be hugely beneficial because it allows people to take part in the ventures as never before. The participation in crowdfunding will increase for sure, and will lead to growth of investment opportunities and avenues. Because in the increase of choices, there will be more ‘noise’ and the funding gap will remain – the innovation will keep happening regardless if anything competition for money will increase.
What is the value of a successful crowdfunding campaign in future fundraising efforts?
Nigel – A successful campaign doesn’t measure success of the business but it is a good sign for investors. It means that the business has a key component: it can sell i.e.can encourage people to believe in its potential for delivery – which is key to success.
How will the experienced investors react on a huge number of new investors at the table?
Nigel – I think that established (old school) investors will have a resistance to the change but most investors will like seeing more people joining the captable as it effectively negates some of their risk. It might even become a new validation point – how many people are behind your business, comparing to the current – how many “high caliber” investors do you have?.
Which businesses should consider a crowd-investing round?
Nigel – Only businesses who have value from having non-accredited investors should use new crowdvesting, and those are most likely local companies, product businesses, the B2C type of ventures – but businesses still need strategic investors so entrepreneurs need to keep that in mind. I’d also mention that in angel communities it’s known that good investors who spread their investment money (bets) over 19 companies that went through deep validation (due diligence) process, have a very good chance to get their money back and even make some kind of a return. Equity crowdvesting will make people money and even might create a new “gold rush”. It is definitely broadening funding opportunities for businesses that might not be the next unicorns, but will create jobs and economic stimulus
What motivates you to work with startups? Why take the Global EIR role at CU Boulder?
Working with startups is a high energy activity, I very much enjoy the spirit of founders (both experienced and inexperienced). My Entrepreneur in Residence role at CU Boulder lets me feel like I’m a coach working with elite athletes. The only difference is these athletes are competing in the business world. The role has also allowed me to recently find my next startup here in Boulder, Colorado, which will be spinning technology research out of the University into an incredible new business.
If anyone would like to get together for a cup of tea, or to jump on a call – please drop me an email, I’m always approachable and happy to help. email@example.com