Will the real entrepreneurs, please stand up
According to James Altucher’s New York Post essay, New York City is dead forever. Alrighty then. A former hedge-fund manager, Altucher arrived at this conclusion in large part by polling his investment banker friends and collectively lamenting a dearth of opportunities stretched across the horizon in front of him. Um yeah dude, welcome to the reality of 2020.
As a Cornell grad who walked right into a plum IT job at HBO, had the luxury of blithely blogging about an NYPD traffic stop and has generally skated through an unbroken boulevard of opportunities, for James Altucher, it must truly appear bleak for him and his ilk now. But for everyone else, who perhaps like me, had a very traumatic police experience, or had to claw themselves up from nothing, and became accustomed to swimming upstream, the starting pistol has only just been fired.
True entrepreneurial spirit can gaze upon ruins and spot possibilities. Just look at how concert venues have adapted this summer to social distancing guidelines. The result? People love this setup, which in turn, has actually made concerts more attractive to a wider audience. More such ideas have been springing up since. And entrepreneurs like me, whose business is to fund, develop and grow startup and development stage companies, are loving all of the possibilities.
Rush to fill the vacuum
What Altucher’s privilege has blinded him to, is that adversity inspires innovation. The vast majority of people never had their horizon teeming with opportunity. They were instead forced to get creative and persist. That’s why diverse teams outperform homogeneity by an average of 33% in profitability. People familiar with maneuvering a broken system bring unique perspectives, life experiences, ideas and solutions to problems.
Altucher also missed the notion that as citydwellers flee and rental / sales prices drop 30–50%, that means these items just became affordable to a whole new group of people. And ‘when there’s blood in the street…’ well, ya know. The mass exodus of renters and businesses from city centers has created space for previously priced-out folks to live and work within the city. Sure, they’ll need startup capital, but that’s where equity crowdfunding steps in. This recipe has the ability to reignite economic engines. Althucher should just make a stop by Riverdale and leave a bag of money for crowdfunding campaigns by my door on his way out of NYC. Tah-tah.
Connect entrepreneurs with tangible access to cash
Equity crowdfunding was originally designed for small businesses to access funding and come 2020, the accredited investor definition has just been expanded upon. Additionally, the SEC at one point even approved a temporary cap boost ($250k from $107k), particularly for small and micro businesses to more easily raise capital during this health crisis while also proposing to raise the standard funding cap from $1.07M to $5M. The pieces for economic prosperity are finally in place to fund entrepreneurs & small businesses and let non-accredited everyday people get in on the action! Getting money into the hands of underfunded founders with creative, innovative ideas means jobs in their communities and a real shot at economic recovery across the board.
The data is finally in from the big tech experiment of the past two decades, and it has been a resounding failure. The pandemic surge in ESG investing has signalled that investors have seen the writing on the wall too. The unicorns of yesteryear have been dropping like flies (Wait, what? An office space sub leasing company didn’t revolutionize the world?! Nor a robot pizza maker!?) and investors are rushing to the crowdfunding ecosystem for stability. Not surprisingly, equity crowdfunding just smashed July records and shows no signs of slowing down. Looks like connecting true innovators with tangible money sources is a winning formula in our new world trajectory. And, speaking of “innovators”, Adam Neuman and the rest of the unicorn founders have been remarkably silent during these trying times. Funny, that.
What’s next
New York city may be dead to James Altucher, but not for me or the countless entrepreneurs — some of whom I assist — with dreams and plans for what’s next. Just like when Henry Ford invented the car, he couldn’t have predicted that he’d also inadvertently invent the skiing industry. There’s no shortage of innovative ideas, just founders without proper access to capital to make their businesses a reality. Tech founders from Ivy league schools simply don’t have the large wealth of real world experience that’s vital for disruptive problem solving. A founder who has experienced homelessness or poverty, for example, has more valuable experience in creative thinking and real world decision-making than an Ivy league grad who’s only worked in the family business.
Now, with the equity crowdfunding space surging, diverse entrepreneurs are connected to tangible money sources and a new genesis of entrepreneurship is upon us. But this time, two decades won’t be wasted on imaginary unicorns again and many many more of tomorrow’s business leaders will look like me. Shhhh 🤫
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