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Crowdfunding: The American Dream Reloaded

Ever since the JOBs Act was signed into law there have been lots of stories about how bad it will be next year when it’s finally legal to do so. Some people are afraid it will be like the wild west. I think it’s time we all took a deep breath and look at this for what it was intended to do.

According to the SBA, each year more than 10 million people consider starting a business. Out of this group, only three million take the plunge and actually start a business. It’s one of the most exciting endeavors that any person can undertake and it empowers people to take control of their own destiny and not wait for corporate America or the government to give them a job. Will they succeed? Who knows. But their level of success or failure holds true no matter where they get their funding from.

Let’s not stamp out this new and exciting process of accessing capital for those that will be successful and create the jobs our country needs just because it comes with the same risk that every other investment does -of losing it all. Let’s start off crowdfunding next year by admitting that everything in life is a gamble, including Angel and VC investments, (which also fail to make a return more often than is assumed by the general public) and that at least with crowdfunding you have a direct say so in where your money is being invested.

Also, if that business fails to provide a return on your investment which many will, at least you will have made that choice of your own free will and contributed to the greater good that entrepreneurial activity creates for our society at large and you can then think of it as a donation just like people do all over Kickstarter and RocketHub and other donation based crowdfunding websites.

Look at the reality.

During the dot com heydays there were millions of friends and family investors, and they were less protected than crowdfund investors will be next year. Did they all see a return on those investments? No, of course not, so how can we create different sets of expectations for success with crowdfund investing than for every other investment/gamble we take in life, especially when whatever precautions we take, it will never insure or guarantee the fate of an investment anyway?

Look at the restaurant business for example, with its 80% failure rate. Do people stop investing in them? No, in fact people love to invest in restaurants. They understand the risk and are willing to take it because if their investment turns out to be one of the 20% that succeed they could own a piece of SPAGO or ownership in a company as successful as Starbucks. Are they stupid for investing in them or are they exercising their free will with their own money to take the risk? We can’t start off overestimating what people should expect from a crowdfund investment and assume that these investments will return any better odds than Startups or small businesses have ever returned in the past.

The reality is; life is a gamble and we all unwittingly take a loss in every kind of investment in life, especially ones we didn’t put our own money into, like oil, healthcare costs, banks and other bailouts, for example. When those companies that control the necessities we all depend on for our survival make bad decisions and/or fail and go bankrupt we all pay a big price and take a loss. Where are the safeguards and protections for that?

Equity crowdfunding democratizes the funding of startups and expanding small businesses. The risks to qualifying individuals are limited, and the benefits to the economy and the creation of new jobs will accrue to everyone.


Funding Roadmap is an innovative, networked business planning and due diligence reporting system for funding professionals and entrepreneurs alike. It also includes a video pitching platform, a document repository and deal flow marketplace so entrepreneurs will have an online medium to brilliantly communicate all the essential data – along with their personal passion and commitment.

Ruth. E. Hedges is the creator and CEO of and Startups Across America. She has been featured in the New York Times, on ABC’s Home Show, and the Financial News Network did a two-part series on her for their show entitled ‘American Entrepreneur.’ For more information please visit

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