Crowd-funding as a support to Georgian Stock Exchange
12 July, 2012
Crowd-funding as a support to Georgian Stock Exchange

Many refer to crowd-funding as a “new phenomenon” (or – at worst – the “new bubble”). However, it is not as new as we may think; as a concept, it has been around for some centuries already. The novelty lies in the technologies and the mindset that are giving it a new momentum, technologies and mindset that we will consider in this chronological record of the main events leading to what we now refer to as crowd-funding.

 

If we accept the “web” and the “crowd” are two essential elements in defining Crowd-funding as an activity, the very first examples could perhaps be observed in the late ‘90s, when some Internet campaign funded projects and charity fundraising platforms started to appeal. This model was developed and expanded into what is known as peer-to-peer lending, an alternative to traditional bank lending, and it grew to accommodate the process of lending money outside of exclusively developing countries.

One of the first peer-to-peer lending sites to launch was Zopa, a London-based company providing an online money exchange service. Zopa operates within the UK, Italy and a service is being developed for Japan. In 2006, Prosper was launched in the US, following the same model. In 2007, Lending Club launched the second peer-to-peer lending site. Like KIVA, individuals submit requests for funding, which include a story, a picture and their credit risk. However, these platforms were not particularly successful in the beginning, possibly because of overly tight regulations, and maybe because society was not quite ready, yet.

As outlined above and as already mentioned in the last post, crowd-funding has strongconnections with the reach, empowerment and engagement of social media. The rapid evolution of social media is giving free rein to our social nature without the limits of any borders. For some time ‘Crowds’ have been forming affinities around interests and missions, creating new products and services, feeding innovation and, to using the Internet to exploit the spare processing power of millions of human brains. One of the results has been a new mindset built on trust and participation, ready to embrace diversity, capable of reinvent

ing itself, and empowered to change the world. Our need to support and get involved in projects we care about is deep rooted in our humanity as much as our tendency to improve things and innovate in order to live better.

Crowd-funding can be seen as a natural response to fill the gap left in capital formation and funding models in the modern society. March, 8 2012 in the House of Representatives crowd-funding initiatives were treated to a rare showing of bipartisanship. The House passed HR 3606 to make changes to USA securities laws allowing crowd-funded companies and other early-stage ventures to legally solicit investors. Now it is up to the Senate to pass its equivalent bill SB 1933, which is expected by most legislative analysts. Congress has gotten letters of support from hundreds of venture capitalists and corporate founders over the past several months. The question of the day is: Is there necessity to adopt similar law on crowdfunding in Georgia in order to lower investment threshold for small and medium size business ? As of today- Georgian Stock Exchange (GSE) - is the only organized securities market in Georgia. Designed and established with the help of USAID and operating within the legal framework drafted with the assistance of American experts, GSE complies with global best practices in securities trading and offers an efficient investment facility to both local and foreign investors.

Automated trading system of GSE can accommodate thousands of securities that may be traded by brokers from the workstations at the GSE floor or remotely from their offices. As of July 1, 2012 133 companies were traded on GSE, with total market capitalization of USD 0.86 billion and the average daily turnover of USD 391,605 . Variety of small and big size banks in Georgia do a good job in private banking; however a friend of mine running bakery shop would like to have a credit line as a backup to the family business and it might be crowd-funding which would help his business be prosperous. Let’s leave this issue for lawmakers and bankers. All that glitters is not gold and not necessarily good for Georgian small and medium size business, however crowd-funding might be a remedy.

Print
Other Stories
Plastic bags to be banned in Georgia from September
Polyethylene bags will be forbidden in Georgia soon.
Famous Sukhishvili Diet: Get perfect shape rapidly
Summer is approaching and everyone wants to get into shape and loose some extra weight.
Visa-free travel to EU countries: Must-know tips for Georgian citizens
The visa-free travel regime for Georgia with Europe will take on March 28. Citizens with biometric passports will be able to travel to the Schengen countries
Inspectors targeting polluters to appear in Tbilisi in April
Street inspectors responsible for fining street polluters will appear in Tbilisi from April 3.
11 people in a week: Alarming statistics of road accidents in Georgia
Eleven people were killed in road accidents throughout Georgia last week.
New parks to be constructed in Tbilisi districts
Several new recreational areas will appear in Tbilisi.
Temperature anomalies detected in Georgia at different times
The storm that hit Imereti region of western Georgia yesterday is of anomalous nature, the National Environmental Agency claims.
First Georgian researcher obtains Gail Kelly Award in education field
The doctoral thesis of a Georgian researcher, Nutsa Kobakhidze, was evaluated as the best by the American International and Comparative Education Society.
Hungarian tourist killed by avalanche in Kazbegi
Mountain Resorts Development Company of Georgia’s Ministry of Economy and Sustainable Development urges tourists to abide
Get Energetic with Radio NRJ Georgia
International music station Radio NRJ started to broadcast on March 14 from its Tbilisi studio in the new Radio Café
Street artist transforms Georgian alphabet into funny monsters
Georgian artist Tamuna Tsakhnakia, widely known under her nickname Tamoonz, has transformed unique Georgian alphabet into a bizarre creatures.
Pay with a poem for coffee or tea in Tbilisi cafés
To celebrate the World Poetry Day, several Tbilisi cafés will serve coffee and tea for free, if a customer leaves a poem behind.
Batumi Calm After Yesterday’s Clashes
The situation in Georgia’s Black Sea city, Batumi, is calm today, after last night’s clashes between protesters and law enforcement
Georgian guides – ‘the ambassadors of the country’ talk about what tourists like and dislike
More and more tourists visit our country each year and they are most often hosted by private companies and tourist guides.
European Court Extends Suspension On Change To Georgian TV Owner
Europe's top human rights court has prolonged its suspension of an attempt by the government in Tbilisi to put the country's biggest independent television
Young Georgian inventor’s wheelchair might change the life of PWDs
Young Georgian student Karlo Khutsishvili, the winner of Millennium Innovations Award competition and the author of a number of inventions such as Multiclimatizator and Life Saver,
Solar energy for monasteries in Georgia
The EU-funded Civil society Local Energy Efficient Network (CLEEN) has set up the “100% renewable energy to monasteries of Georgia” project
Fly to Europe for 9.99 euros! - Wizzair marks visa liberalization with a special discount
Wizzair, the largest low-cost air company in Central and Eastern Europe is planning to mark the signing of a document granting Georgian citizens
Strasbourg Court suspends the enforcement of the Supreme Court decision on Rustavi 2 case
Rustavi 2 TV company Director General Nika Gvaramia announced that the Strasbourg Court has suspended the enforcement of the Supreme Court decision
A story of Georgian Hachiko
The story of Georgian Hachiko has touched the hearts of many people on social media.
BBC: Georgia row over TV channel ruling
Georgia's Supreme Court has ordered to return the nation's biggest independent TV channel to its previous co-owner,
“Rustavi 2” TV Company case: Court decision, supporters, confronting parties
By the decision of Georgia’s Supreme Court, the businessman Kibar Khalvashi is declared the owner of 60% of shares of Rustavi 2 TV Company
US Embassy concerned on the Supreme Court’s Decision Related to Rustavi 2
The United States views with concern the impact of the Supreme Court’s decision regarding Rustavi 2,
The first Children's Library opens in Guria Region
The first Children's Library was opened in Georgia’s western Guria Region.
Five Georgian students to visit NASA
Georgian 8th grade students will visit NASA Space Center and take part in the educational program in the USA.
PHOTO OF THE DAY
Other Stories
More and more Georgian alternative musical bands are emerging on the scene.
Wooden products are gaining popularity on Georgian market, including glasses, watches, bags, etc. A new item was added to that list recently – bows made of natural wood.
Georgian citizens will be able to enter the EU without a visa for short stays, under a new law passed by the Parliament on Thursday, - Official website of European Parliament reports.
The heavy fire has entirely destroyed the building of a trade centre Chidren’s World last night.
The world-famous American musician Moby expressed his support to Georgian rock band The Mins at the nearest Eurovision contest publicly.
In all prisons throughout Georgia a special Christmas service was held.
An awesome footage featuring foreign students singing Georgian song has gone viral on social media.
Have you wondered how New Year was celebrated in Georgia and what it looked like in the past?
Company GD ALCO, the leading distributor of premium spirits in Georgia, hosted yet another very respectable guest, Guilliame De Guitaut, the brand ambassador of Hennessy,
Elle, a popular French magazine focusing on fashion and beauty, listed jacket designed by Balenciaga’s Georgian creative director Demna Gvasalia among 10 Most Wearable Winter Trends.
GEL Exchange
USD
1
USD
2.4472
EUR
1
EUR
2.6408
GBP
1
GBP
3.0431
RUB
100
RUB
4.2951