2,362 crowdsourcing and crowdfunding sites
Michael Dinan, founder and CEO of Dinan & Co., recently announced the launch of a new crowdfunding portal named ConfidentCrowd. The portal aims to increase investors’ confidence by using Financial Industry Regulatory Authority (FINRA) registered broker-dealers to screen businesses looking to raise capital.
Dinan announced the company’s launch at FINRA’s 2012 Annual Conference in Washington. ConfidentCrowd has already had over 100 broker-dealers signed up to participate. The advantages for broker-dealers in signing up are outlined on the portal’s website: access to a new client base, new companies looking for funding, and a new crop of investors.
For the investors, ConfidentCrowd offers, foremost, the ability to minimize risks. Experienced broker-dealers will lower “the risk profile by evaluating and structuring the investments prior to making them available for investment,” said Dinan. Such assurances will resonate with those who are wary of crowdfunding fraud. The broker-dealers will also ensure that businesses keep to best practices and industry regulations, which the Securities and Exchange Committee will finalize by early 2013.
It remains to be seen how stringent the rules and regulations for crowdfunding portals will be. Will they be able, for example, to exercise judgment when it comes to selecting which companies they work with without acting as “advisers”? Questions will remain until the SEC hammers out the specifics. By pairing up with experienced broker-dealers, however, ConfidentCrowd is positioning itself to take on any unforeseen challenges the laws may contain.