This is our response to - http://online.wsj.com/article/SB10001424052702304141204577508820786062502.html
Written by Sang Lee - the CEO & Founder of Return on Change, a crowdfunding platform focused on high impact startups. You can follow him @RoCSang and Return on Change @RoCspeaks.
It seems clear that the reason our innovation has been driven to photo apps and messaging systems with more emoticons is because that is where the incentives lie. When a society begins to reward for less, the bar is set lower and we become stuck in a state of stagnation with no value generation. If our thought leaders are now restricted to creating entire empires around a +1 amusement concept, what can we expect to see in the next 10 years?
It’s scary, but true. There are so many new startups popping up in the United States that are being acquired, traded or often times purchases to be decommissioned for the sake of stifling competition. It’s a world dominated by the giants where the very act of innovation needs to be purchased or extinguished. This is largely originating from a short term view driven by the need to generate nearly instantaneous economic returns. It’s very hard to argue with this as well. From an investor perspective, the venture capital that is invested needs to command a handsome economic return, and quickly (ideally).
So what happened to clean energy or medical advancements or sustainable investing? Businesses that most of us agree have the potential to be disruptive and pervasive not only create breakthroughs in their respective industries, but also drive positive change throughout all sectors.
These were deemed too risky. Too financially risky that is. Investors stayed away, the financial markets contracted due to massive meltdown, and now we are stuck with businesses that are able to make a quick buck without any particular accountability on its outcome or larger impact on society.
This is not to say that I’m opposed to R&D in sexy new phones and techie devices. I’m a huge techie myself, and would not suggest that we stop advancing here.
But using this kind of ingenuity to solve the problems that plague the world? Now that’s sexy. We’ve seen the young, the driven and the bright create systems for disaster notifications, deliver clean water and help developing nations harness cheap and plentiful solar energy.. There are even soccer balls that generate a charge while in use, which can subsequently be used to plug in a lamp for a night reading light in areas without grid connections.
How do we properly empower these types of entrepreneurs and incentivize them to use their genius and wit in ways that will benefit society?? We have to get the capital to them. It’s tough developing any business without money, but especially difficult for those that require high upfront costs and often times significant engineering as well as prototype development.
Crowdfunding is going to be one of the critical ways we drive innovation. We have already seen huge success in driving creativity and philanthropic endeavors through existing platforms in the United States. However, with the passing of the JOBS Act in April 2012, startups are not only able to solicit donations, but meaningful investments from the general public. So what does this really mean?
Prior to the passing of the JOBS Act, the general public (unless you met certain wealth requirements) was for the most part prohibited from investing in early stage startups. The wealthy and the savvy pre-determined what types of businesses came to life.
So, if the investment community is focused on short term gains as opposed to innovation and progress, what kind of change can we expect to see? Now some of this power has been returned to those actually affected by it, the rest of us. We can now invest in the businesses we want to see grow and create a better future both for ourselves and upcoming generations.
We hope to see you at the forefront of this revolution where you can become the new voice of startup businesses and the financiers of your own future, because everyone’s invested!