Re: The opportunity with the Financial Crisis
Frederic Baud
opportunities to reform the institutions should necessarily be
approached from the mid-term angle on one side and the longer term
angle on the other side.
In the mid-term, I don't think we should see any loosening of
regulations and quite on the contrary we will probably see additional
controls (see the SEC's reaction on Prosper). Which means that when
thinking mid-term, we should try to find solutions based on the
current tools to implement what existing institutions don't want to do
or don't do well. As mentioned earlier by Sam, a Credit Union for
Entrepreneurs seems a try and tested legal form of organization that
could do a lot. If the problem is the collection of funds on a wider
basis, I think that in the mid-term, there are probably no other
solutions than to comply with SEC's injunctions for p2p lending.
In the longer term, we can imagine asking Politics to change the
rules. On my side, I'm starting to think that a lot of the problems we
have are due to the rigid legal framework for contracts. I've been
spending times lately thinking a lot about p2pmoney and alternative
currencies as a way to let entrepreneurs loosely and quickly organize
resources when bootstraping projects.
Cheers,
Frederic
On Dec 2, 6:45 am, "Marc Dangeard" <mdang...@gmail.com> wrote:
> The idea to do loans to entrepreneurs through other means than the banks
> that have failed us is being explored here and in France (check outhttp://www.les-entrepreneurs-pour-la-relance.org/). Here in the US, the
> latest changes with FDIC somewhat removed the incentive for businesses for
> now to go somewhere else to look for investment opportunities for their cash
> above the limit: the limit has been removed until the end of the year.It is
> probably still worth exploring other options. The best I have seen in terms
> of investment for small businesses is SBIChttp://www.sba.gov/aboutsba/sbaprograms/inv/index.html
>
> Still they require the classic "investment team with proven record" model
> for psychological comfort but it may be a route.
> Otherwise moving to a private equity market place with only businesses or
> accredited investors would work. One such marketplace currently in beta is
> this:http://www.pcmexchange.com
>
> it would be nice to seize the opportunity brought by the current mess, I am
> interested in keeping this discussion going...
> Best,
> Marc
>
>
>
> On Mon, Dec 1, 2008 at 5:36 PM, Sam Rose <samuel.r...@gmail.com> wrote:
>
> > Is this a United States-based effort or elsewhere?
>
> > If US, let's pool research efforts on what is legal.
>
> > For instance, there is definitely some leeway in
> >http://sec.gov/investor/pubs/invclub.htm
> > for investing clubs
>
> > But then again, there could also be a legal framework for information
> > and rating, that has nothing to do with the actual exchange, which
> > could be facilitated by the businesses themselves, until formal
> > frameworks are produced. I don't think there is any requirements for
> > registration or regulation on people discussing businesses, mentoring,
> > performing due dilligence, and rating businesses on multiple factors,
> > with the hope that this will lead towards individuals deciding to
> > invest in an enterprise.
>
> > I have argued in the past that we should not just explore loans, but
> > also *investment*. This is something that we are going to explore in
> > depth withhttp://localfoodsystems.orgin the coming months.
>
> > The flip side of the coin is that, instead of investment, or loans,
> > when an enterprise is working within existing commons, like open
> > license content, open source software, and open license hardware/
> > product design, that people might pool resources around ventures as
> > *donations* instead of loans or investments. See
> >http://openfarmtech.org/weblog
> > for an example. I think this can work best when an enterprise is
> > based on a commons. The enterprise does snot have to be organized as
> > not for profit formally. Mine is not, and I work extensively with the
> > development of open source software and open license content, and am
> > entering the realm of open source hardware/product design. If you can
> > find stakeholders who recognize that you are working towards
> > contributing to a common pool resource, they could be willing to pool
> > money, time or other resources with you towards creating commons-based
> > building blocks that can be re-used for both for-profit and not-for-
> > profit ventures in the future. Some enterprises (like mine) may be
> > compelled to continually contribute to a resource pool in order to
> > help sustain or accelerate the development of open licensed "stuff"
>
> > Consider building commons-based building blocks for independents and
> > social enterprises, or contributing towards their development.
>
> > On Nov 21, 10:17 am, MarcD <mdang...@gmail.com> wrote:
> > > I talked yesterday with an entrepreneur who opened up a real
> > > opportunity for Entrepreneur Commons:
> > > - her company has cash in the bank that exceeds the $250K that are
> > > protected by FDIC
> > > - she considered what to do with the money above that limit: create
> > > many bank accounts, or invest in something else
> > > - she finally decided to invest some of this extra money into other
> > > businesses that had issued promissory notes
>
> > > This is great news to me, as it is exactly what we are talking about
> > > with Entrepreneur Commons.
> > > She has taken a risk and invested in other businesses: peer to peer
> > > lending for businesses.
> > > Once the idea is out there, 2 notes are not a statistically relevant
> > > number and so a better way to do this would be to mutualize the
> > > investments through a Fund that would then spread investments into a
> > > larger number of deals. The side effect is the dilution of the due
> > > diligence, you have to rely on other people's judgment. But if every
> > > investor in the fund (in this case through their business) does its
> > > own due diligence chances are the quality of the deals will be good.
> > > And then if we apply the mutual guarantee fund concept, we can add a
> > > layer of protection.
>
> > > So if you are in contact with entrepreneurs whose businesses have
> > > extra cash today, we should explore how we can build on this
> > > opportunity.
> > > Feedback welcome :-)
>
> --
> Marc Dangeard - m...@dangeard.com
> Blog:http://bizcoach.blogspot.com
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