Why Financial Firms are Joining the Crowd

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Crowdfunding is a marketing vehicle. Sure, it’s a great way for entrepreneurs to raise money and a great way for investors to find institutional-quality deals. But above all Crowdfunding is about marketing. And that’s why financial firms – venture capital firms, investment banks, private equity firms, and others – are moving into the space.

When I was the director of a private equity firm, we spent our time doing what all investment firms do, working to broaden the firm’s investor base and find more and better deals. Because of the legal constraints that have been in place since the early 1930s, we (and everyone else) had to rely on private networks. While we developed a large private network, the process of manual network development is slow by design.

With the passage of the JOBS Act, everything has changed. Now, investment firms can take what was essentially a marketing function and move it online, using tools and marketing best practices to build their networks.

Today I run a public relations firm, Leverage PR, which works at the intersection of technology and finance. With my background Fin-Tech I’ve naturally gravitated to Crowdfunding and serve in leadership roles in the industry, including serving on the board of CFIRA, the leading trade association. From that vantage point I can see the trends in both technology and finance. Without doubt, one of the most pronounced trends is that financial firms are moving into Crowdfunding, with established players launching their own portals or partnering with others.

Visit CrowdfundAttny.com to learn the six leading factors encouraging financial firms to join the crowd!