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  1. #11
    Junior Member
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    Apr 2017
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    India
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    4
    I don't think so.

  2. #12
    Junior Member
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    Mar 2017
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    19
    Crowdfunding platform as a concept itself is exactly the same as a stock exchange.

    There are only 4 differences between crowdfunding and stock exchanges:

    1) Crowdfunding platforms are for smaller businesses, stock exchanges for medium and large size
    2) Crowdfunding is much less regulated and the paperwork is much easier to handle (no prospectus etc.)
    3) Crowdfunding currently has somehow different investor base: enthusiasts and people who have never invested a penny in stock exhange (mainly because they find it very interesting and with high social value to support small businesses and startups) versus stock exchanges, where thare are huge involvment of institutional investors and middle class in countries, where investments in stock exchanges are huge part of their retirement plan, i.e. USA.
    4) Stock exchanges are just market organizers, crowdfunding platforms are like agents - you believe in them and hope they bring only the best startups to their platform.

    In essence, equity crowdfunding and stock exchange is the same thing. Take a look and NASDAQ Private Markets in USA or Euronext in Europe. It is just a matter of how this process is regulated. Theoretically there should be no problem to develop a pan-European stock exchange for small businesses (they already exist but are not very effective, i.e. Junior Exchanges).

  3. #13
    Senior Member
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    Sep 2016
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    181
    I think they are just two different bodies that can exist independently of each other because they serve different audience.

  4. #14
    Member
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    Jun 2017
    Location
    Boca Raton
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    30
    No, but they will have two different audience.

    Stock exchange can be affected by big companies greatly. You may study about stocks for a long time, but you may still not be able to get money back based on your knowledge. On the other hand, crowdfunding is easier to predict since big companies won’t have as much as influence as on the stocks. If you follow the news, understand what is going on in this industry, you will be able to know which field may become profitable in the future.

  5. #15
    Junior Member
    Join Date
    Jan 2017
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    11
    I do not think crowdfunding will replace stocks, I think stocks never dies so it is the reality.

  6. #16
    Senior Member
    Join Date
    Sep 2016
    Posts
    181
    I am buying the idea that the difference between them is simply their audience and mode of regulations. I guess that is the summary of the whole thing.

  7. #17
    Junior Member
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    Jun 2017
    Location
    Roswell
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    28
    It's not going to happen in 10–15 years. I summarize the reasons as follows:

    Fundraising Amount
    Funds raised from equity crowdfunding are much lower. For example, Title III offerings in reliance on Section 4(a)(6) of the Securities Act of 1933 (Regulation Crowdfunding) allow companies to raise up to USD 1 million in a 12-month period. Regulation A allows companies to raise up to $50 million. Although there is no limit on fundraising amount for offerings in reliance on Regulation D, Rule 506(c), funds raised in equity crowdfunding are much lower than in stock market.

    Liquidity
    Equity crowdfunding involves investment in private companies. Since there is no readily available secondary market or public stock exchange for the sale of shares purchased through equity crowdfunding, it may be difficult or even impossible to sell your securities purchased from equity-crowdfunding. For example, investments made in a Title III crowdfunding transaction can't be resold for a period of one year and there may be some other restrictions on the resale of the securities, you may not always be able to cash your shares you invested in a private company in quickly or for as much money as you paid.

    Difference in Company Segment
    Companies seek to raise funds in equity crowdfunding are mostly early stage startups. However, companies listed in stock exchanges are mostly mature and established businesses.

    Disclosure Requirements
    The disclosure requirements are less demanding in equity crowdfunding. For example, Title III offerings only require disclosures of financials in the latest two fiscal years and filing up to three annual reports pursuant to Regulation Crowdfunding. Even for Regulation A offerings, the disclosure requirements are less than what you would currently expect from companies traded on stock exchanges.

    How about in long run?
    It is very likely that even after 15–20 years, both equity crowdfunding and stock exchanges will co-exist. I think the very optimistic situation is the total fundraising amount in equity crowdfunding can catch up with or be comparable to that in stock exchanges. But the odd of stock exchanges being replaced by equity crowdfunding is very very low.

  8. #18
    Senior Member
    Join Date
    Sep 2016
    Posts
    181
    Quote Originally Posted by Markallen View Post
    It's not going to happen in 10–15 years. I summarize the reasons as follows:

    Fundraising Amount
    Funds raised from equity crowdfunding are much lower. For example, Title III offerings in reliance on Section 4(a)(6) of the Securities Act of 1933 (Regulation Crowdfunding) allow companies to raise up to USD 1 million in a 12-month period. Regulation A allows companies to raise up to $50 million. Although there is no limit on fundraising amount for offerings in reliance on Regulation D, Rule 506(c), funds raised in equity crowdfunding are much lower than in stock market.

    Liquidity
    Equity crowdfunding involves investment in private companies. Since there is no readily available secondary market or public stock exchange for the sale of shares purchased through equity crowdfunding, it may be difficult or even impossible to sell your securities purchased from equity-crowdfunding. For example, investments made in a Title III crowdfunding transaction can't be resold for a period of one year and there may be some other restrictions on the resale of the securities, you may not always be able to cash your shares you invested in a private company in quickly or for as much money as you paid.

    Difference in Company Segment
    Companies seek to raise funds in equity crowdfunding are mostly early stage startups. However, companies listed in stock exchanges are mostly mature and established businesses.

    Disclosure Requirements
    The disclosure requirements are less demanding in equity crowdfunding. For example, Title III offerings only require disclosures of financials in the latest two fiscal years and filing up to three annual reports pursuant to Regulation Crowdfunding. Even for Regulation A offerings, the disclosure requirements are less than what you would currently expect from companies traded on stock exchanges.

    How about in long run?
    It is very likely that even after 15–20 years, both equity crowdfunding and stock exchanges will co-exist. I think the very optimistic situation is the total fundraising amount in equity crowdfunding can catch up with or be comparable to that in stock exchanges. But the odd of stock exchanges being replaced by equity crowdfunding is very very low.
    Great write up I must say

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