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Capital Formation And Other Tools For The Planet Entrepreneur

Financing is essential to the creation and management of a business. It allows a startup to go from idea to reality, and to buy the goods it needs to produce other goods, to offer a service, or to

Financing is essential to the creation and management of a business. It allows a startup to go from idea to reality, and to buy the goods it needs to produce other goods, to offer a service, or to pursue new projects and ventures.

Traditionally business venture could raise money in two ways: debt financing and equity financing. In debt ?nancing the entrepreneur takes on debt that must be repaid; in equity ?nancing the entrepreneur trades shares of the company for capital.

Now there is a new tool that allows capital formation to be facilitated through the internet and from many small investors: crowdfunding. Crowdfunding is revolutionary because it adds two new ways to fund a business – donations and rewards.

Imagine 200,000 dedicated Red Cross blood donors each giving $100 toward the development of a breakthrough leukemia medication. That would mean $20 million of funding for a worthwhile cause, $20 million sourced from the crowd.

I recently shared my own knowledge of and experience with crowdfunding to would-be Planet Entrepreneurs in the book by the World Entrepreneurship Forum edited by Steven Strauss. As a think tank member of the Forum and as speaker on its 6th edition in Lyon, France last 2012, I now join the other members in creating a guide for the world’s problem solvers: The Planet Entrepreneurs.

In its introduction, Strauss says: “Whether it is climate change, pollution, poverty, economic stagnation, or underemployment – we need innovative, workable solutions more than ever. Fortunately, to the entrepreneur, problems are opportunities.” And we see this reiterated in all its pages filled with first-hand experiences and expertise from all around the globe representing various challenges that saw solutions through entrepreneurial courage and resourcefulness.

In this book, fellow think tank members and now contributors include Inderjit Singh from Singapore who shared his thoughts about the global entrepreneurial revolution that is transforming lives and communities.  Nikhil Agarwal, from India, talked about the entrepreneurial technological transformation around the globe. Both need financing to sustain them.

Jones, Corral, Meloto, Javelosa and Sim described entrepreneurs as the explorers of the new world.  Colin Jones, from Australia, said that entrepreneurs are today’s global adventurers. Thais Corral, with Jarrod Russell and Danielle Cesano, from Brazil, highlighted environmentally friendly businesses that sustain both the present and future generations. 

Tony Meloto, from the Philippines, discussed social entrepreneurship and the end of charity. Jeannie Javelosa, also from the Philippines, is empowering women to be world-class entrepreneurs. Jack Sim, from Singapore, discussed the untapped potential of the 4 billion people at the base of the pyramid.

Baybars Altuntas, from Turkey, welcomed entrepreneurs into the borderless world; Fadi Sabbagha, from Lebanon, elaborated on the social media as game changers; Anna-Lena Johansson, from Sweden, discussed the paradigm shifts in education; and Nicolas Shea, from Chile, highlighted the creation of an entrepreneurial ecosystem.

Laurel Delaney, from the United States, is teaching planet entrepreneurs how to bring a business into the global digital space.  The editor, Steven Strauss, also from the US, is inviting readers to the entrepreneurship revolution that is sweeping the globe, via intrapreneurship and the self-employed entrepreneur.

Truly, entrepreneurship is revitalizing the global economy after the financial crisis. I believe the trend is going to be on ecosystem integration, education and capital formation.

I see our work in The Soho Loft, my financial  media firm covering the latest trends in spreading innovations in capital formation, an essential part in the ecosystem that fuel entrepreneurial growth and sustainability.

If you are an aspiring entrepreneur or an established one and want to help transform lives and communities around the globe, the Planet Entrepreneur guide is available from Amazon  or Barnes & Noble. Join the movement of global problem solvers, the discoverers and implementers of creative and practical solutions.

David Drake is an early-stage equity expert and the founder and chairman of LDJ Capital, a New York City private equity advisory firm, and The Soho Loft, a global event-driven financial media company helping firms and funds advertise to investors. He is running the  Real Estate Investing and Leading Crowdfunding Conference in NYC on Nov 14, 2013. Listen to him speak together with Keynote Barry Sternlicht of Starwood Capital. Details of the event can be found at: You can also reach him directly at [email protected]

The Fed model compares the return profile of stocks and US government bonds.