Why Legalize Startup Crowdfunding For-Profit Investing - Slava Rubin

In Chapter 12 of 13 in his 2012 Capture Your Flag interview, crowdfunding entrepreneur and IndieGoGo CEO Slava Rubin answers "What Role Does Government Relations Play in What You Do?"  Rubin notes how the entrepreneurial campaign element of his crowdfunding company IndieGoGo has allowed him to collaborate with President Obama's Startup America Initiative and help startup business initiatives receive financing.  He notes the potential in for-profit investing using crowdfunding.  Slava Rubin returns to CYF for his Year 3 interview.  As CEO and Co-Founder, Rubin has helped transform cause and project fundraising by establishing his company IndieGoGo as a global leader in crowdfunding.  He is also active in philanthropy, starting the Music Against Myeloma annual charity event to fight cancer.  He graduated from the Wharton School of Business at the University of Pennsylvania. 

Transcript:

Erik Michielsen: What role does government-relations play in what you do?

Slava Rubin: Well, we’re actually really excited that we’re partner with President Obama’s Startup America to help stimulate entrepreneurship in America. So, there’s three major groups of funding categories on Indiegogo. Number one is creative, number two is cause and number three is entrepreneurial. So, within entrepreneurial it’s really important to figure out how we can work together. I mean, there’s great case studies of entrepreneurial campaigns for example Walk In Love, which went from a single designer who was selling t-shirts in a kiosk was able to fund his campaign on Indiegogo and now has 15 employees in a Lancaster, Pennsylvania Mall or two engineers in California that were turned down by 43 VCs were able to fund their electronics product on Indiegogo and then got a $650,000 investor or a gluten-free bread company that was able to start from her own kitchen and now be named by CNBC as one of the Top 15 Start-ups in America. These are all examples of how people can use Indiegogo today. In the future, there’s the potential for the government shifting the law around funding online and being able to allow for-profit investments, which would be very interesting.

Erik Michielsen: And where does it stand today and, you know, what are the hopes for tomorrow?

Slava Rubin: So, this is very timely question actually just this week there was a new crowd funding law that just passed the House of Representatives. So, that’s actually two bills that have passed in the house to allow crowd funding to become legal, specifically what that would mean is that you don’t have to be accredited investor, which means you don’t have to have over a million dollars of net worth and the actual entity raising the money would not have to register with the SEC, which can be a very cost prohibitive process. The White House is very much behind this proposal, which they’ve already said but the Senate has not weighed in yet. So, really it’s a matter of seeing what the Senate will see and if any of the financial institutions that are lobbying against this will slow this down really allowing crowd funding to become a for-profit opportunity will really bring in significant more liquidity into the funding of entrepreneurial businesses and allow for many more jobs to be created.