I often hear suggestions for improving access to capital that call for the creation of a single, monolithic something or other. “If we only had a mega [fill in the blank], then we would have all the capital we need!”
There is certainly an appeal to be able to go to a one stop shop and find everything you want. This is the premise of the giant shopping malls and stores.
In certain cases, economies of scale dictate this centralized concentration of economic activity. Without scale, the costs of operations are so high that many individuals and businesses would not be able to participate.
However, there are often consequences of such monopolies. Often there becomes a limited selection in choice. Why have 10 varieties when one will do. There is often a tendency to stick with status quo. This is good enough. To some extent, this is one of the greatest problems facing our capital market – not enough variety and not enough innovation. Between the impact of market forces and government regulations, we have seen a concentration of the capital markets on Wall Street that represents a microscopic percentage of the total businesses in the world. By definition, a new startup cannot qualify for listing on the stock exchanges without already having a great deal of capital. Innovation and startups need not apply.
We now live in the Internet age and the term economies of scale often does not apply. With a single computer and access to the Internet, it is possible for one person to be their own business empire. The Colorado Capital Congress is seeking to do the same thing for members of Colorado’s capital industry. We believe that the Internet can be leveraged to provide customized capital, precisely fitted to the circumstance with no limitation of variety and always open to innovation.
The best capital industry will have multiple solutions to every capital need. A recent blog post in Dreamstake describes the large variety of options for funding in the United Kingdom. Private money, public money, public/private partnerships and crowdfunding are all working together to fill all the gaps so that there is a capital solution to every problem.
We need to so the same thing here in Colorado. We already have a far larger selection of capital solutions than most people know. So, part of our solution will be public awareness and education. More solutions are needed. Let’s build them. What solutions? Let’s find out. The Colorado Capital Congress is conducting the Colorado Capital Survey. When gaps are identified, we can work with existing individuals and groups or create new ones to fill the gaps.
If only there was a single source of information on the Colorado capital industry. Well, there is – the Colorado Capital Congress. But, now we are engaging in circular arguments. J