Crowd-Funding

One of the most compelling ways to increase job growth in this country is to breakdown the barriers of access to capital. With banks not lending, many would-be entrepreneurs have to rely on friends and family, and many can't scrape enough funding to get their idea off the ground. With that said, there's a lot of cash on the sidelines and many investors have grown tired of anemic financial markets, and would love the opportunity to buy a piece of someone's start-up.

Just last week, HR 2930 passed in the House by 407-17, and the bill is supported by the white house. Still, the WSJ published in article today on the naysayers, claiming that investors run the risk of falling prey to scams. Certainly analyst coverage and registration with the SEC provides a false sense of comfort. Just ask anyone who owned shares in WorldCom, Tyco, and Enron.

Of course vetting fund raisers properly will be an important part of the process, and there are ways to leverage social networking platforms and the Wisdom of the Crowd to make educated investment decisions, not to mention third-party audited financial statements. Capping the amount that a single investor can contribute will also mitigate risk.

With an official jobless rate hovering over 9% (and an under-employed rate much higher), we need to consider innovative ways to jump-start our economy. Crowd funding has already proven its magic with art projects through Kickstarter. Now it's time to spread the model to the broader part of our economy.