Basically an online Transaction Banking platform for fundraising through vetted crowdsourcing members. Platform to help, Individuals, businesses and entrepreneurs across the globe connect to funding sources (individuals or company). Platform where member can easily search to fulfill their investment criteria, and members (lenders/borrowers) participate in a wide variety of loan product and equity options, across all verticals.
There are a few out their right now. Streetshares, LendingClub, KickFurther, etc. And as Curt mentioned, many equity based Crowdfunding platforms, or "Portals" to be more accurate. (I'm not a fan of CF regs and the resulting portals they end up with, don't get me started.)
Their are significant regulatory hurdles in the space, especially the more jurisdictions you venture into, and the more key word verticals you incorporate. Basically any aspect you add like equity options, loan products, "Investments", Multiple countries/ states, etc. all add their own regulatory hurdles or even entirely new regulatory bodies you have to worry about. Consider a more lean startup approach domestically and with very few verticals.
You will also find the business model is usually an exercise in contradictions. A borrowers goal/ health to fulfill their obligations is to pay as little interest as possible. A lenders goal/ health to keep providing the funding is to receive as much interest as possible, or at least minimize risk, in which is difficult in this market that is historically higher risk. (Risk management is a high expense) Then there is you trying to figure out how to add enough fees in there to make it worth it for you and cover all those regulatory expenses.
There is always ways of doing what you want, just not always the way you want to do it. Fintech innovation is left to those who know regulations well or are willing to pivot their concept as needed to fit the regulation(s). Or willing to take risks in grey areas and defend themselves in court if the regulatory man ever comes knocking. In other words, you have to have something more than the other competitors have in this space to succeed. Otherwise it's quite the expensive me-too industry to try to jump into and expect to compete. But to answer your is yes, it is viable. But..... there are a lot of buts......
Keep me on the list of people to bounce ideas off if you proceed further, i'm interested. I recently went through some regulatory work with my own version of what you are describing. I fell within the regulatory grey area that made me confident I could safely proceed. But through that process of figuring out how to comply, it forced me to think outside the box.
That led me to identifying a much greater opportunity than my original plan, with significantly greater return without having to charge the borrower any interest/ fees at all. So I am actively working on making that pivot.
Yes. You can.
In the U.S. there is a way to do so using SEC Regulation CF (basically operating under much less onerous SEC/FINRA regulation instead of much more burdensome banking regulations). Basically you can dis intermediate the entire banking system with this.
I personally have an intense interest in doing this. And actually have ready access to a lot of the pieces necessary to do this.
I have just not found the right team. This is not an easy venture and it requires a strong team.
If anyone is interested in doing this, please contact me directly. They can either help me, or I can help them.
I am fairly easy to find with a search on the internet.
So a platform that combines both debt crowdfunding like Kiva and equity crowdfunding portal like Crowdfund Mainstreet and the other mentioned below with a bit of Gust.com investor/entrepreneur matchmaking?
Thank you Curt, Kelly and Megan. I concur with most of your advice and comments.
This will be purely Peer-to-Peer Lending where socialized commerce between members and other one is Equity-Based Crowdfunding where members of the crowd become part-owners of a company which is raising funds in the form of offering shares or dividends. In both cases we will be an intermediary and make money on transactions.
I understand this could be tough to execute. I have been associated with investment and private banking regulation for quite some time and I feel this is doable if we integrate the right technologies from the beginning with a greater data security/ jurisdiction into business processes with the regulatory oversight, analytics and required reporting.
My goal here is to get as many as opinion/ critique /comments and also see if anyone is interested to brainstorm the solution and possibly part of the founding team. If anyone is interested feel free to email me at firstname.lastname@example.org.