Collaborative Investment – working with others to achieve the funding required to reach a shared goal

CollaborativeInvestmentCollaborative Investment was once the domain of Kings, Dictators and Industrialists.

Once upon a time, before the 18th century, large scale financial and infrastructure endeavours were the domain of royalty and dictators.

Things changed with the Industrial Revolution. This took place from the mid-18th to early 19th century in certain areas in Europe and North America. Industrialisation shifted this power to orchestrate large scale financial and infrastructure endeavours to a few citizens, the industrialists.

Today though, Joe Citizen can drive large scale financial and infrastructure endeavours through joining with others on a Collaborative Investment Platform.

As we head into 2015, a passionate, driven and focussed individual can access the capital, technology and people needed to take on any challenge, assembling them and the resources required on a Collaborative Investment Platform.

Two years ago I facilitated an alternative financing workshop in Far North Queensland in Australia. During 2014 the experience gained from running the oldest equity crowdfunding platform in the world and the growing need for investment in sustainable regional growth progressed significantly. In October 2014 the RSF Collaborative Investment Platform was launched at a Regional Solutions workshop on “How to design, fund and sustain regionally significant projects”.

Lets look closer at the word Collaboration.

Collaboration is working with others to do a task and to achieve shared goals.

Collaborative Investment is working with others to achieve the funding required to reach a shared goal.

Since the Global Financial Crises collaborative investment is becoming more and more centre stage. Mostly because Government budgets have tightened and banks are simply not lending as they did before.

Initiatives by regulators and entrepreneurs in the area of Equity Crowdfunding and Rewards Crowdfunding are forms of collaborative funding where the promotor works with others to achieve the funding required to reach the promotors goal. The emphasis here is on the promotors goal. In the case of a Collaborative Investment Platform it is a joint goal and the participants decide what they are contributing. For some it may be money, others it may be time or materials.

Crowdfunding platforms have evolved to fulfil this growing individual desire to connect to likeminded people and share that connection by engaging in collaborative activities through financial contribution. Already worldwide these new funding platforms have provided a secure and relatively simple vehicle for raising funds that is now publicly accessible.

Collaborative funding examples, until recently, have been mainly in the private funding and commerce area. Meaning government organisations, especially those responsible for large scale projects have not been part of the crowdfunding or collaborative funding area. With recent innovations in funding platform technology, combined with sustainable project development processes in the collaborative investment area, especially for projects including both public and private funding, it is coming to life.

The main reason is the convergence of two major trends. Collaborative funding is the outcome of two disruptive mega-trends. Firstly, there is technical disruption. This has been led by the entrance of the internet into the private capital formation process. One trend is the the power of real time financial transactions and reporting and the interactive opportunities of social media have brought new efficiencies and obsoleted old systems.

The second trend is one of cultural disruption. This is the increasing desire of people to be meaningfully involved with what they buy, the things they do and where they invest.

A Collaborative Investment Platform helps:

  • Local investors to invest locally
  • Broaden project investment partners
  • Increase local stakeholder support
  • Deliver catalyst projects stalled by funding shortfalls.

On a Collaborative Investment Platform, project investors can be:

  • Federal, State or Local Government
  • Commercial investors
  • Social investors
  • Local investors
  • Place sponsors

Each contributor has conditions for their contribution that are reflected on the organisations profile page with published tipping points for each contributor.

The emergence of Collaborative Investment Platforms will enable governments to expand investment partners in projects that have been traditionally fully financed by the public sector and will allow local passionate, driven and focussed individuals to access the capital, technology and people needed to take on a challenge, assembling them and the resources required on a Collaborative Investment Platform.