Celebrity Crowdfunding – Too Much of a Good Thing?on May 14, 2013 at 1:29 pm
Celebrity crowdfunding is the next new thing in angel investment. In the last week Donald Trump and real estate magnate Barbara Corcoran both announced their involvement in crowdfunding sites. Time will tell whether celebrity involvement is a good thing for entrepreneurs and investors or simply a bold faced novelty.
Trump launched FundAnything.com with the help of LearningAnnex founder Bill Zanker, a guy who knows a couple of things about mass appeal. FundAnything.com enables entrepreneurs to fund anything, from philanthropic campaigns to entrepreneurial initiatives. In a signature move to remain the center of attention, The Donald promises that, “I’m giving away money,” and the site goes on to say that he will actually invest in some projects himself. There aren’t any details on that point.
FundAnything has positioned itself to go head to head with crowdfunding stalwarts Indiegogo and Kickstarter. FundAnything feels the same and looks the same. What’s the difference? According to Donald, it’s The Donald. He told Forbes, “Those other sites don’t have Trump, and that’s a big difference,” he told They just don’t have Trump.” Bill Zanker had more to say, “Bringing Donald Trump into this changes the whole paradigm. It’s totally different. For now it’s always been these Brooklyn hipsters doing it. Nobody knows about crowd-funding yet. You bring Donald into it, he’s the most luxurious businessman brand out there. It’s a whole game changer.”
RockThePost, strictly speaking, is not a crowdfunding site. It is a site with a mission of matching accredited investors with worthy projects. According to a press release: “Via its services, RockThePost aims to be a resource for both entrepreneurs and investors by streamlining the capital raising lifecycle and providing the needed support during the fundraising process. The company’s mission is to democratize the fundraising practice.”
What differs here is that RockThePost, unlike existing crowdfunding sites, enables the sale of equity shares in companies. It may well be a preview of the JOBS (Jumpstart Our Business Startups) Act, which will enable anyone to invest via equity crowdfunding sites. The JOBS Act was enacted by Congress last year and is awaiting SEC regulations to go into effect. Corcoran got her first taste of angel investing on the ABC show “Shark Tank” through which she invested in over 20 start-ups. Corcoran transformed a $1,000 loan into a $5 billion real estate empire.
Is celebrity crowdfunding too much of a good thing? It’s difficult to know whether the entry of celebrities into the world of crowdfunding is a positive development for entrepreneurs. It does mean that crowd funding has hit the masses, and will attract more attention. That could bring more fraud into crowdfunding. It could also flood the market with dubious projects, making the promising projects more difficult to find. A positive trend may well be that it attracts ever increasing funds into an area that enables good ideas to become a reality.