TruCrowd is an equity crowdfunding portal with four specific regulation crowdfunding verticals including cannibals and blockchain. The firm recently announced the addition of another vertical focusing on music. Musicfy will establish funding opportunities for music producers and musicians. The company states that they will look to onboard “a minimum of twelve quality, fast-growth, high-valued companies in 2019.”

Differentiating Offerings via Specialized Portals

Many Equity CF portals are seeking to differentiate the types of campaigns that they offer. Some, like LocalStake in North Carolina, are differentiating by geography at the State or municipal level. Other portals are seeking differentiation based on an industry vertical.

Both are smart moves especially for software, architecture, music, film and other creative industries.

Creative industries are fueled by social capital. Harvard Economist Richard Caves explores these characteristics in his book “Creative Industries Contracts Between Art and Commerce.”

The community of creators, stakeholders, supporters, and other industry participants form social capital to determine value in a subjective field. Take music for example. Some musicians possess technical skill and mastery yet are not able to find mass commercial appeal.

Caves discovers that creative value is largely formed at the early stages of an artist’s career. They win support from critics, producers, art schools, and other industry stakeholders who legitimize the artist. Stakeholder support is a form of social capital that propels the musician to stardom later in their career. The musician taps the praise of critics, places their work with key publishers, and finds other routes to capitalize on earned social capital as their careers advance.

Offering a specialized crowdfunding portal provides an opportunity for a community to form around a specific industry vertical or geographic location. Not only can the crowd become investors, but they can provide early stage social capital to a musician.

This process offers efficiencies for the portal. The portal maintains contact with a group of crowd investors dedicated to an industry vertical or geography. Investors don’t need to wade through projects that they aren’t interested in.

Look for more specialized equity crowdfunding portals as the industry matures.  

One untapped specialization is the local. Equity crowdfunding can act as an important tool to unlock investment in local communities, specifically communities that don’t have a large amount of local capital. Who better than residents to invest in new infrastructure, Smart Cities, and local small businesses? The return could be important but also the benefit of utilizing the service or enjoying a new local amenity.