Crowd Funding Gets Startup Money From Strangers

Startup Office - Photo: Generation Y StartupIf you’ve dreamed of building a killer app or launching a tech start-up in your garage, you may be able to secure the funding from virtual strangers, if the Senate passes a new crowd funding bill called the Jumpstart Our Business Startups Act.

Crowd funding would allow investors to provide seed money to everyday entrepreneurs over the Internet and receive shares or dividends, which is currently prohibited by federal regulations. Forbes calls crowd funding  a potentially disruptive technology and points to an NPR story that reveals how game-maker Double Fine circumvented publishers and raised $2 million in a matter of days to develop a new product.

Group funding has been used by charities for years—think PBS telethons— and most recently, the crowd-financing website Kickstarter.com provided funds for 33 films at the South By Southwest Film Festival.

While the U.S. House of Representatives passed the bill recently, it met with some resistance in the Senate, so stayed tuned.

In other news, adding new products to the 1996 Information Technology Agreement (ITA) could create 60,000 jobs according to a new study by the Information Technology and Information Foundation (ITIF). Specifically, manufacturers such as Apple, Dell, Hewlett-Packard, and Intel and services companies such as Google, IBM, and Microsoft will benefit from the expansion of ICT trade. This is expected to boost U.S. exports of information and communications technology products by $2.8 billion and revenues of U.S. IT firms by $10 billion.

The study points out that this expansion will not only create manufacturing jobs and benefit developing countries, but result in the creation of 7,500 additional high-skill jobs in the U.S.

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