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.

Other Stories
The secret of the Green Lake
Why did the state hide the fact of Aslan Abashidze’s buried weapons existing?
A closed circle – What’s going on with Georgian media?
In modern Georgia, the media is a powerful participant in political processes, and as a rule, it swells with power as elections draw closer.
Georgian language classes banned in Gali
Georgian language classes have been officially banned in village schools of Gali district in the occupied territory of Abkhazia, according
Georgia listed among the least emotional countries in the world
In the future, how people feel will be a critical way to assess a country, says a Gallup official.
 This cute couple on Metekhi bridge will fill you with positive energy – A new work of art by Gagosh
A Georgian artist called Giorgi Gagoshidze mostly known by his pseudonym Gagosh has gifted our city with another creative work of art
Alarming statistics
Alarming statistics
Out of 400 thousand socially vulnerable, only 4 700 are looking for jobs.
British expert considers Georgian streets a permanent warzone
Georgian Journal has invited Alan Ross, head of the Road Safety project by TRACECA
A bit of Georgia (hanging) in NATO - James Appathurai invited to Nino Chakvetadze's studio
James Appathurai, NATO Deputy Assistant Secretary General for Political Affairs, has published a photo
“My Dad is eating me” – Giorgi Margvelashvili and his son
Georgia’s First Lady Maka Chichua has published new photos on her Facebook page.
 Ali and Nino monument has been removed
Efforts to remove the so-called Ali and Nino monument have been successful at Batumi’s coastline
“Ali and Nino” sculpture in Batumi damaged
The “Ali and Nino” monument has been damaged in the city of Batumi.
Powerful storm hits Batumi (+Gallery )
On August 25, intense rain has gradually evolved in a full-blown storm
Queen Ketevan’s remains will be transported to Georgia at no cost - Archpriest
According to Archpriest Giorgi Razmadze, the Indian side will hand over the holy remains of Georgian Queen Ketevan at no cost.
How sure are you of what you eat? - Six products that are most frequently counterfeited
Information that a consumer might read on the products’ labels is not always true.
812 cases of infant death reported over a year and a half in Georgia
As the Ministry of Health has informed InterPressNews, 821 cases of infant death were reported over a year
Sad reality of the modern world - Illustrations by Steve Cutts
Steve Cutts, a London-based illustrator, thinks that art amounts not only to aesthetic beauty and self-expression
Making Tbilisi's Future – A look at Georgian capital's current problems
Lincoln Mitchell is a writer and specialist in political development.
Garden of Bombs and Raspberries
The Garden Bombed by Russians is Now Home to Raspberry Saplings
How alarming is Georgia’s declining birthrate?
Georgia’s demography, unfortunately, grows worse by the year.
The Lucky Ticket – How Nikoloz Rachveli Met Barbra Streisand
Georgian Journal asked the famous musician Nikoloz Rachveli to recall and describe his meeting with his idol Barbra Streisand.
When Will the raging Minibus Race End?
The poor condition of road infrastructure, defective transport, speed limit violations and uncoordinated functioning of governmental offices
The new artifact discovered at Grakliani Hill can change world history of writing
Culture Minister Mikheil Giorgadze and Head of the National Agency of Cultural Heritage Nikoloz Antadze have visited Grakliani Hill in Georgia.
Traditional horse race takes place in Bakhmaro, Guria region
On August 19, a traditional horse race was held in Bakhmaro, resort in Geogia’s Guria region.
Giorgi Mshvenieradze, lead dancer of Georgian Ballet, passes away
We bring you extremely sad and tragic news. Guga Mshvenieradze, Georgian Opera and Ballet State Theater’s lead dancer passed away yesterday.
31 years ago, on this day, a hero was born
Today is the birthday of Georgia’s National Hero, Giorgi Antsukhelidze. He would be 31 today.
PHOTO OF THE DAY
GEL Exchange
USD
1
USD
2.3805
EUR
1
EUR
2.6495
GBP
1
GBP
3.6231
RUB
100
RUB
3.5214
Other Stories
Paata Burchuladze, a famous Georgian opera singer and founder of charity fund Iavnana has married his beloved.
In the aftermath of the heavy rainfall in Batumi, coastal city of Georgia, part of May 26 Street was flooded.
Univisión, an American Spanish-language broadcast television network that is owned by Univision Communications
Rescuers have recovered the bodies of two people who perished in the fire that broke out at a paint and varnish warehouse
In this video we present you the rules on using a visa-free agreement with the European Union, which will come into power
Every summer the beautiful Georgian coastal city of Batumi, offers different surprises to its guests.
National Geographic has published an article about Georgians as pedestrians. The author of the article is Paul Salopek.
American artist John H Wurdeman was drawn to the former Soviet state of Georgia by the country's folk music, BBC reports.
Death toll of yesterday’s explosion at an apartment block in the Gldani district of Tbilisi has reached 5.
September 2015
Mon Tue Wed Thu Fri Sat Sun
1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30