During my stay in Vienna for Crowd Dialog 2018 I stayed in an AirBnB apartment taken to a whole new level of professionalism. Back in the day AirBnB was introduced providing an opportunity to rent your apartment when it’s empty or have a chance to live like the locals, but is now more and more run by professionals like my host in Vienna. They operate several apartments dedicated only for AirBnB and have outsourced everything from cleaning to check-in arrangements. For some reason they had also framed by own picture beside the bed. That was just odd.
Similar development is taking place in crowdfunding – what was once targeted for crowds on the grassroots, is now getting new forms and attracting professionals.
I’m not saying such evolution is good or bad, but it ought to be remarked that crowdfunding might not be how we got to know it. In Crowd Dialog I came to realize that particularly two things are taking crowdfunding further from the crowd. From citizens, masses, people, from you and I.
Banks with new hats?
The head of Nordic Crowdfunding Alliance Rotem Shneor pinpointed that the nature of crowdfunding is changing. The logics of crowdfunding is used more and more by professional and institutional industry members.
Sure, it is in the greatest importance that each crowdfunding platform is responsible for having extremely high standards in their codes of conduct. However, this doesn’t mean that the platforms should look like banks, act like banks and talk like banks. As Shneor said, crowdfunding industry is on its way to be occupied by traditional players just wearing new fancy hats.
Also the “crowdfunders” have become more professional, or in other words, the professional institutional investors have found crowdfunding platforms. The volumes institutional investors can bring and the costs of such customer acquisition are very appealing indeed. This has led the transactions from ordinary people being just droplets in the sea for many platforms.
ICOs, STOs and other abbreviations
In the talks and workshops of Crowd Dialog the greatest attention was on cryptocurrencies and tokenization. If I had taken a sip of beer every time ICO (Initial Coin Offering) was mentioned I wouldn’t have been there anymore to hear the last talks about STOs (Security Token Offering). I firmly believe that in the future cryptos play a huge role on crowdfunding and that what’s now alternative finance will eventually become mainstream. However, in 2018, we are still a million miles from talking about cryptocurrencies and crowdfunding in the same sentence. Even though there’s lot of talking going on, cryptocurrencies are still distant and aversive to the masses.
To me this seems odd as I regard the primary ideology behind crowdfunding to be providing ordinary people opportunities to fund things to which they hadn’t had a chance to invest before. If we take the concept even further by focusing on and fuzzing about tokens, we are definitely losing the crowd. Once again the words by Julia Groves come in place: “We can’t talk about crowdfunding if we don’t allow the crowd in.”
CEO, Joukon Voima