“Crowdfunding has the potential to not only change the way that startup businesses access capital, but to allow entrepreneurs to create and keep jobs in places like Danville or Roanoke,” Senator Warner said today in Arlington at the first of a series of events that he’s holding to help Virginia entrepreneurs better understand how crowdfunding can be a tool for business growth.

Today’s event included a brief introduction by Senator Warner, followed by a panel discussion with a diverse range of regional experts and business leaders, including the CEOs of Indiegogo, NewsiT, Smallknot, and TapCaps.

“Virtually all of the net new jobs that were created in America over the last 30 years have been created by startups,” Senator Warner said. 

Crowdfunding is a way for businesses to raise capital through the pooling of many relatively small investments.  Though not a new concept, advances in internet technology have paved the way for crowdfunding to “really change the world,” said Senator Warner.  Using new platforms such as Indiegogo and Smallknot geared towards connecting businesses with potential small investors, some entrepreneurs have raised millions of dollars needed to get their businesses started.  

A recent report cited by the Milken Institute estimates that $2.8 billion would be raised via crowdfunding in 2012 alone, an 87% increase over 2011.  Panelists also explained how these initial investments gathered through crowdfunding can help attract capital from more traditional sources. 

Though potentially a great tool for entrepreneurs in need of capital, Senator Warner and most of the panelists agreed that the potential pitfalls of crowdfunding – including investor protections, managing investor expectations, and even liability questions – must be carefully weighed in order to protect those small investors and contributors.   

Resources from today's seminar will be available here. Senator Warner will be holding at least 4 more crowdfunding-related events across the Commonwealth between now and the end of the year.  The next will take place in Norfolk on Thursday, October 25, and will be followed by a networking happy hour.  For more information, please visit Senator Warner’s crowdfunding page.