Betaworks, a hybrid startup investment and product creation organization, is launching an equity crowdfunding platform for investors. Though Alphaworks is not true crowdfunding at this stage, it's putting things in place for that day when the SEC gets its act together. However they are able to take advantage of the JOBS Act and go public with investment campaigns for accredited investors. Checking out Alphaworks and See.Me's current campaign might just be a great way to wrap your head around what's to come.
Betaworks Is Involved With A Few Music-Related Startups
Betaworks is a company taking an increasingly high profile in the tech startup world due to seed stage investments in an incredible range of successful startups from Airbnb to Twitter to Rap Genius. At some point they started launching their own sites and services such as Rushmore.fm.
To be honest I've had questions about every music-related startup with which they've had association. In the case of Rushmore.fm, I question the viability of yet another platform that seeks to "rethink the music industry" by bringing together fans and artists on a third party site.
There are so many and they are mostly failing. But Betaworks has also invested in See.Me which looked a bit shaky when I checked it out but claims to be a big success. If all goes well I have no problems with being proven wrong about their future.
See Me [Investment] Syndicate Promo Video
Betaworks recently launched Alphaworks as a separate LLC to take advantage of changes due to the JOBS Act. So they can promote funding campaigns publicly at this stage but only accept accredited investors.
As long as its limited to a small class of investors, it can't be legitimately considered crowdfunding unless you just don't care about what such words mean anymore.
But, more importantly, it's setting the stage for that day when the crowd can invest, for better or for worse, in startup companies to which they previously had no access.
On the other hand, they may never be a true crowdfunding company if their current investor screening process is an indicator:
"The process works by taking 'reservations' from investors for a piece of the equity in a startup. Betaworks then vets the potential investors, prioritizing anyone who is relevant to the company...Accepted investors are then confirmed as accredited investors by Folio or SecondMarket."
To be honest, if they did become an equity crowdfunding platform, it behooves them to continue finding ways to screen investors because things are going to get messy for awhile. So however the future of Alphaworks plays out, they seem to be starting from a solid position.
Since I'm not an investor I haven't tried applying to see what else I can find out but they also mention that "anyone can apply for the See | Me Equity Gift" so that sounds worth checking out to see what hybrid moves they're making here.
See.Me Is A Current Example Of An Alphaworks-Powered Campaign
Another opportunity for digging deeper is the See.Me campaign which is now in progress.
This campaign is relevant to music tech startups because the platform supports musicians, including Reggie Watts who appears in the above video, as well as other creators.
So both Alphaworks and See.Me's campaign are worth a look even if you're simply trying to figure out where things are going and want a prefigurative example of what is ahead.
It's not the only such platform and since equity crowdfunding is legal in the UK there are other examples that might be closer to what is ahead for the States but then again, Betaworks understands startup investing and is building a platform to support what they see coming so definitely check them out whether you hope to invest or to raise funds via equity crowdfunding.
- Union Square Venture's Partner Andy Weissman Talks Music Startups
- Rushmore.fm: Can They "Rethink The Music Industry From The Ground Up"?
- See.Me Includes Musicians, Adds Donation System To Artist Portfolios And Contests
Hypebot Senior Contributor Clyde Smith (Twitter/Facebook) is currently relaunching All World Dance. To suggest topics about music tech, DIY music biz or music marketing for Hypebot, contact: clyde(at)fluxresearch(dot)com.