New Kingmakers and the JOBS Act

Editor’s note: Here’s another column from Solomon. Hope you enjoy it!

Solomon’s bio can be found here.

–Bessie.

In the world of the kingmakers

We live in an age of kingmakers. These are self-styled supreme individuals who (in an increasingly lopsided and plutocratic society where the wealthy class control the government), anoint the winners and victors of the spoils in our democratic and capital-driven society.

These kingmakers can be media moguls who spotlight chosen celebrities to commercially emulate and to revere their habits of choice. Kingmakers can also be the sovereigns of our financial system who direct the streams of vitally important capital and decide when, where, with whom, and under what terms to provide cash and siphon some as payment.

In the world of charities

The world of charities and non-profits is considered too sacred to be subject to maven selections. However, there stand titans like the Gates Foundation among many others. These organizations promote humanitarian whims and unilateral actions to dictate the who, how and when marginalized people with little recourse to social justice, are engaged and helped. And many times, the final effort falls short of the intended motive.

Even in the face of such isolating disparity and seemingly foregone conclusion of the common cause taking reins of the common good, there is a sign of hope for the democratic spirit of people. It appeared out of all places, from the US legislature (the horrors!).

JOBS Act: Opportunities for small investors

This month, the Jumpstart Our Business Start-ups (JOBS) Act was passed. The JOBS Act is a new law that allows regular Americans to invest small amounts of money into businesses and entrepreneurs they believe in.

Past and present kingmakers

In the past, the response to the devastation and massive frauds in the lead up to the Great Recession of the 1930’s, only accredited investors with big pockets and big, sensible, rational brains to invest. Certain people were allowed the privilege of investing in companies that they felt offered innovation or at minimum, a sizable return on investment (ROI)- the biggest possible, for the investment sought.

This created a system that contributed to a plutocratic system taking root, one where the wealthy had both the funds and the position to invest and grow the future of America. But that was nothing new. Patronage has always been the privilege and repast of the elite classes.

It was not the English, French or Italian peasantry who influenced society. The wealthy classes were the catalysts who drove the scientific revolution in the 16th through the 20th centuries. It was the moneyed, intellectual and aristocratic classes of Europe appointed themselves as the patrons of science, knowledge, and thus, cultural advancement.

Fast forward to the roaring progress of the 21st century fueled by electronic technology and the landscape has changed with dramatic flair: The technologies of our generation are those that empower everyday people, particularly individuals. These kingmakers bring knowledge and access to information in raw and unfiltered form, unleashing democracy in our every action.

The new kingmakers

And now the power of democracy has come to the funding world in full scale, allowing anyone, even those with modest means, to express their voice on matters of relevance that impact their lives. It is a quiet revolution that’s been taking place over the past few years, one that is redistributing power from the hands of the privileged elite (banks, high net-worth individuals, venture groups) to the everyday person.

People are using common sense and judgment about society’s needs and not dependent on bottom-line profit considerations. People are applying a practical model to fund, promote and be associated with concerns important to them, concerns that they feel will make a difference our their interdependent and interconnected world.

From now on, patronage will no longer be the privilege of the wealthy. Crowdfunding sites like TechMoola.com which I co-founded with my partner Tom, can bring back innovation to America. Now anyone can be the patron of an invention.

JOBS Act: Pros and cons

Critics of the JOBS Act predict that it won’t be long before a scandal emerges from this new law. Honest folks will be fleeced of their investment by unscrupulous individuals. The critics are probably right in pointing that out.

But as with every good, there is an unpleasant bad side. The upside is that people can participate and invest in companies that reflect their idea of a better future. People can also share in the company’s financial success.

The downside is that a minority will cheat and abuse the system. Regulations will ultimately limit but never eliminate the cheaters. Infrastructures to limit abuse might include:

Legal framework
Industry policing
Establish new products such as low-cost insurance for crowdfunding based securities

The goals should be to protect the small investor’s interests, and encourage, enable, and facilitate the best of American innovation to flourish on its native lands once again.

:idea: And for that, I salute the JOBS Act and the opportunities it will bring for entrepreneurs and people alike.

Solomon Nabatiyan, Ph.D.
Columnist
Secretary of Innovation
“In imagination & creativity we trust…”