In addition to starting his own company, Schubros Brewery, San Ramon resident Ian Schuster is also leading a group of small business leaders and entrepreneurs to bring in a new form of financing for local startups.
The idea is called "crowdfunding" — which would allow new small businesses to sell equity to a broad shareholder base via the Internet.
Supporters argue crowdfunding provides entrepreneurs and small business owners the green light to engage the middle class and their local communities as investors, which they say is a massive, yet previously prohibited, capital alternative to angel investors, venture capitalists and banks. They also say that crowdfunding gives small investors the opportunity to “get in on the ground floor” and support local commerce.
The U.S House of Representatives agrees, with legislation already passing with overwhelming bipartisan support. The senate is expected to take up the bill soon, according to a press release.
Schuster, who heads the newly formed Initial Crowd Offering Group (ICO) which is rallying support of the legislation, says the main concern opponents have is fraud. The worry is someone could set up an attractive website and con investors.
Schuster says the solution is to take advantage of resources from the Service Corps of Retired Executives (SCORE) and the Small Business Administration (SBA).
“The SBA holds the solution to safeguarding the crowdfunding process,” Schuster said. “As an entrepreneur, I want crowdfunding to pass of course, but I’m just as worried about fraud as are the bill's detractors. But we have resources already in place to address that issue — take SCORE, for instance, with 364 offices and over 13,000 volunteers, who don’t receive a dime of tax-payer money. It can provide low-cost, face-to-face validation of a company’s legitimacy along with the voice of reason to save or dissuade the overambitious entrepreneur."
The ICO Group is planning to make presentations in SBA and SCORE offices throughout California in March and April to discuss the advantages of crowdfunding.
You can read a full story on Schuster's company, Schubros Brewery, .
Information from this article was provided by a public relations company affiliated with Schubros Brewery.