Nearly $100 million in seed money was pledged to start-ups and creative projects through the crowdfunding platform Kickstarter
.com last year–just one of many websites now dedicated to matching projects with people who have some means and desire to support them. What Kickstarter donors got in return were things like “thank you” credits in films, DVDs
, tee-shirts, flowers, cookies, and concert tickets. Federal and state securities laws prohibit these start-up operations from offering equity to their investors. The good feeling that comes from supporting innovation seems to be the main reward for many people who hand over cash to support the schemes of others online.
But what if there was potential for a financial return on these crowdsourced investments? If startups could offer stock to their small-stake supporters, some (including Amy Cortese in this New York Times Op-Ed) predict that the practice of crowdfunding would explode, opening up far more resources to…