TECHNOLOGY
Insight Crowd investment
Double Fine Productions
Money from the masses
Changing US legislation could allow everyone to invest in start-ups
FANCY investing in the next Twitter?
Or putting some money behind the
new Facebook? More people might
soon get the chance.
On crowdfunding website
Kickstarter, more than 87,000  people
donated a total of over $3 million in
February and March to help create
the video game Double Fine Adventure a year would be allowed to invest
(pictured). This is good news for
gaming fans, but it also highlights the
limits of the burgeoning crowdfunding Representatives, which passed a
movement in the US. People who
gave on Kickstarter are viewed as
philanthropists, not investors. Their
reward for a $15 pledge is a copy of the
game – those who contributed more
will get additional treats – but if Double value in having your
Fine Adventure turns into a blockbuster, most passionate users
they won’t see a penny of the profits.
Legislation making its way
through US Congress could change
that, allowing anyone to invest in the
latest cool idea, with the prospect of
making a profit one day.
US Crowdfunding sites like
Kickstarter, Indiegogo and RocketHub House in a hearing in September that
are held back by laws, created in the
1930s, that prevent small investors
from taking equity in firms. The new
bills would bring the US more in line
with the UK, where such investment
is allowed.
22 | NewScientist | 31 March 2012
The Crowdfund Act, which passed
the Senate last week as an amendment
to the larger Jumpstart Our Business
Startups Act, would let anyone invest
up to 5 per cent of their annual income,
or $2000, in a project or firm that is
listed on a crowdfunding website.
People earning more than $100,000
10 per cent of their income. The bill
now goes back to the House of
similar bill in November. If signed into
law, start-ups would be able to raise
up to $1 million from small investors.
“There is tremendous
be your investors”
The move would be a boost to
tech innovation across the US, says
Sherwood Neiss, one of a group of
entrepreneurs who are lobbying for
the legislation change. Neiss told the
at least 500,000 start-ups will launch
over the next five years once they can
access money from small investors.
“There is tremendous value in
having your most passionate users be
your investors,” says Nick Tommarello,
Self-healing
–More than a game?–
founder of the site Wefunder.com.
As New Scientist went to press,
more than 3000 people had signed
a petition on the site, saying they
would invest if the law passes.
Meanwhile, Kickstarter’s success
continues apace. In just the past
six weeks, four projects on the site,
including Double Fine Adventure,
have raised more than $1 million
each in funding: two video games,
an iPod dock and a comic book.
So does more crowdfunding
mean more creativity? Absolutely, says
Kickstarter founder Yancey Strickler.
He points to the success of the TikTok,
a wristband that turns an iPod Nano
into a watch, which he says kicked off
a “revolution in DIY manufacturing”
with the help of his site.
Christine McKillip, a lawyer at law
firm Handler Thayer in Chicago who has
been following the bills closely, fears
that worries in the Senate over internet
fraud and too much state regulation
could yet stymie crowdfunding’s rise.
“Although regulation can deter
potential fraud, it also raises the costs of
offerings substantially and, in the case
of microfinancing like crowdfunding,
the US Securities and Exchange
Commission may regulate it out of
existence,” she says. Niall Firth n
plastic tells you
where it hurts
GADGETS of the future could
bruise when dropped or scratched
to highlight damaged areas. Don’t
worry though, as a few minutes in
the sun will be enough to fade the
bruise and repair the damage.
Marek Urban and colleagues
at the University of Southern
Mississippi in Hattiesburg were
inspired to create their self-healing
plastic by signs of healing in nature
such as newly formed tree bark.
Earlier self-healing materials
do not change colour and require
focused laser light for repairs.
This new material turns red when
damaged and repairs itself when
exposed to visible light or changes
in temperature or pH. It can also
fix itself multiple times, unlike
previous materials.
Like all plastics the new material
contains long chains of polymers,
except that the chains are linked by
small molecular bridges that break
and change the plastic’s shape
when it is scratched. This shape-
change produces the bruise, which
disappears when energy from the
light enables the bridges to reform
and the plastic to heal.
Urban, who presented the
research at a meeting of the
American Chemical Society in San
Diego, California, last week, says
the new material is not expensive.
“It could be used anywhere really,
the sky is the limit.” Jacob Aron n
drianna Williams/Corbis