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The History of Crowdfunding

The concept of crowdfunding is something that has deep roots in human society, in fact it has existed since the 1700 where the Irish Nationalist Jonathan Swift found in crowdfunding the way to grant loans to poor, but creditworthy, people.

The “crowd” in this case was a group of wealthier people who financed this operations donating sums of money.

Let’s look into the most important events which shaped the history of today’s crowdfunding and equity crowdfunding.

1713–1997- The basis for the crowdfunding as we know it today

The first recorded successful instance of crowdfunding occurred in 1713, when Pope Alexander set out to translate 15,693 lines of ancient Greek poetry into English. This took 5 long years to get 6 volumes. What did they work on? A translation of “Homer’s Iliad” that influences mankind to this day and it turned out he kind of Kickstarted it. In exchange for a shout-out in the acknowledgements 750 subscribers pledged two gold guineas to support Pope’s effort before he put pen to paper. You will find similar stories of groups getting together to support the product creation. There is a well know case when a British rock band funded their reunion tour through online donations from fans. In fact there are more creatives claimed that they crowdfunded their projects such as filmmaker Spike Lee. Back then there neither was platform nor government regulation in place for large scale investments from individuals.

2001: Artistshare, the first equity crowdfunding platform

Inspired by this innovative method of financing, ArtistShare became the first dedicated crowdfunding platform in 2001. Since then ArtistShare projects have received countless awards and accolades including 30 Grammy nominations and 10 Grammy award wins. With this success, naturally more crowdfunding platforms began to emerge, and the crowdfunding industry has grown consistently each year.

2007: The first equity crowdfunding platform

The first known equity based crowdfunding platform was launched in 2007 in Australia, called the Australian Small Scale Offerings Board (ASSOB)[2]. ASSOB now operates as “Enable Funding”, a securities licensed equity raising platform that has raised over $150 million for 176 private companies. Over 78% of these companies were still trading profitably at the end of 2017[2]. (Source: Wikipedia)

2009: Launch of Kickstarter introduces a new era.

Kickstarter, the biggest platform to date, opened its doors in 2009. They provide a simple and clean experience to invest into products they want to see realized. Since then 17 million people have backed a project, $4.5 billion has been pledged, and 169,674 projects have been successfully funded.

2011- “The Jobs act” finally supports equity crowdfunding

In April of 2012, President Barack Obama signed the Jumpstart Our Business Startups (JOBS) Act into law. Also known as “the crowdfunding bill,” the JOBS Act aims to lessen regulation burdens on small businesses and has legalized equity crowdfunding. This includes removing the ban on general solicitation that prevents entrepreneurs from publicizing that they’re raising money.

Though the JOBS Act was signed into law in April of 2012, the Securities Exchange Commission is still in the process of setting regulations to ensure that both investors and entrepreneurs remain protected. Regulations are anticipated to be finalized in early 2013. ( source: https://www.fundable.com/crowdfunding101/history-of-crowdfunding)

2018- TaoDust introduces equity crowdfunding on the blockchain

As it has become obvious that crowdfunding is a financial instrument for the digital age, there are no major systems in place to crowdfund equity.

With the introduction of blockchain in 2009 and constant error proofing we keep pushing the boundaries of what is possible. Countries, such as Malta, develop strong regulatory frameworks to take advantage of the blockchain technology which finally allows equity crowdfunding in form of tokens.

TaoDust becomes the first platform that allow equity trading worldwide.

The equity is registered on a peer to peer unchangeable ledger such as blockchain, in this way we allow liquidity. Therefore, it will be created a market like the stock exchange and both investor and project creators will benefit from this situation.


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