I find it silly to say they've solved the crowdfunding problem when all they've really done is close off a majority of the crowd, and limited actual investment to a select few people who can actually meet their bar. What is it about this project that is actually crowdfunding, rather than a directory for qualified investors?
It seems premature to say if they are getting it right or not given that the first investment hasn't even settled yet. Getting enough investors is part of the equation, but so are working with the investors and the company after the investment is made.
I find it fascinating that people think Crowdfunding isn't working, and that the only way to 'make it work' is to stick with the people who are already doing it on a big scale.
Crowdfunding will work on two levels: one, because legitimate companies and investors will find each other, regardless of size, history or 'accreditation'. two, because of retail investors. Some retail investors will take a bath. There will be wailing and gnashing of teeth. But that hasn't stopped stock market investing or real estate investing.
>"Over time, FundersClub plans to operate liquidity services for private companies, including employee liquidity program management for private companies, and eventually a trading platform for private companies that wish to provide ongoing private market liquidity to their shareholders."
These guys are in it for the long haul, so I hope they have some serious backing. I'm talking like years and years.
But, comments here are right, this isn't crowdfunding. This is just access to YC companies by proxy.
It does look really exciting -- but I agree, it's too early to say they've been successful. FC and AngelList both seem worth consideration.
It's insane that everything else about startups has progressed so much over the past 20 years, but funding (especially the range past early seed incubator/friends and family/etc. and before Series A) is still so rube goldberg. (Series A and later is also broken, but the main limiting factor there is board seats for partners at VC funds, so it's a different problem; great telepresence might be what fixes that, like the iPad based telepresence robot.)
If they could get rid of the silly "accredited investor" limitation this could be huge. I guess it's a legal problem though and they are forced to do it?
Effective Crowdfunding is a hard problem. I am rooting for FundersClub to succeed. This will open up doors to solid startups that for whatever reasons could not get into YCombinator, AngelPad etc.
There are also a lot of startups that aren't right for those incubators. For YC, if you have a family and don't live in SV then that is a massive sacrifice to move out there, which closes the doors to many. Many others are similar.
Where crowdfunding is most promising (in my mind) is that it removes the SV edge for startups. You don't need to be in the valley to be funded, you just need a compelling product/story/team/etc.
Plus, there are also many other startups that have gone beyond the incubator stage, but are not right or ready for VC. You would traditionally turn to Angels in that stage, but why not turn to your users, or the general public?
