Tracing the Origins of Crowdfund Investing
In This Chapter
Studying U.S. history for signs of crowd-based investments
Nudging small businesses out of the capital markets
Preparing for a regulatory overhaul
Turning the crowdfund investing concept into legislation
Grasping what the JOBS Act accomplished
The concept of crowdfund investing isn’t new. Its origins actually trace back to 3000 b.c.; it was one of the earliest forms of financing. Back then, banks and financial institutions didn’t exist, but people with money and people who needed funds did. Deals were made among people who knew each other, and accountability was reinforced through interaction and oversight. The rates of return (interest rates) were determined by how well the individuals knew each other and how much money someone needed. The weaker the connection and/or the more money needed, the riskier the investment was and the higher the return had to be.
In this chapter, we go back to our collective financial ...