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Imagine you invest $500 to help a startup get off the ground through investment crowdfunding. The pitch is slick, the platform feels trustworthy, and the company quickly raises its target amount from hundreds of people just like you. Thensilence. No updates, no financials, not even a thank-you. Youve been ghostednot by a friend, but by a company you helped fund. This isnt just an unlucky anecdote. Its happening across the United States. And while it may violate federal law, theres little enforcementand virtually no consequences. Thanks to a 2012 law, startups can raise up to $5 million per year from the general public through online platforms such as Wefunder or StartEngine. The law was intended to democratize investing and give regular people, not just the wealthy, a chance to back promising young companies. But theres a catch: Companies that raise money this way are required to file an annual report with the U.S. Securities and Exchange Commission and post it publicly. This report, intended to show whether the business is making progress and how it is using investor funds, is a cornerstone of accountability in the system. As a professor of business law, I wrote the book on investment crowdfunding. And in my recent research, I found that a majority of crowdfunded companies simply ignore this rule. They raise the money and go silent, leaving investors in the dark. In most cases, I suspect their silence isnt part of an elaborate con. More likely, the founders never realized they had to file, forgot about the requirement amid the chaos of running a young business, or shut down entirely. But whether its innocent oversight or deliberate avoidance, the effect on investors is the same: no information, no accountability. This kind of vanishing act would be unthinkable for public companies listed on the stock market. But in the world of investment crowdfunding, limited oversight means that going silent, whatever the reason, is all too easy. Its not just 1 or 2 victims When startups go dark, they dont just leave their investors behindthey undermine the entire crowdfunding model. Investment crowdfunding was meant to be an accessible, transparent way to support innovation. But when companies ghost their backers, the relationship starts to look less like an investment and more like a donation. Its not just unethicalits illegal. Federal law requires at least one annual update. But so far, enforcement has been almost nonexistent. Concerned state attorneys general have encouraged the SEC to ramp up enforcement actions. This could work in theory, but its unrealistic in practice, given the SECs limited resources and broad mission. If nothing changes, the crowdfunding experiment could collapse under the weight of mistrust. Incentives worklets use them Fortunately, theres a low-cost solution. I propose that crowdfunding platforms hold back 1% of the capital raised until the company files its first required report. If it complies, it gets the funds. If not, it doesnt. Its a small but powerful incentive that could nudge companies into doing the right thing, without adding bureaucratic complexity. Its the same principle used in escrow arrangements, which are common in finance. In a home sale, for example, part of the money goes into a neutral holding accountescrowuntil the seller meets certain agreed conditions. Only then is it released. Applying that approach here, a small slice of crowdfunding proceeds would stay in escrow until the company files its first annual report. No report, no release. Unfortunately, crowdfunding platforms are unlikely to adopt this voluntarily. They compete with one another for deal flow, and any rule that makes fundraising slightly harder at one platform could send startups to a rival site. However, the SEC has the legal authority to update its rules, and this change would be easy to implementno new laws, no congressional fights, just a bit of regulatory will. Ive even drafted a proposed rule, ready-made for the SEC to adopt, and published it in my recent article, “Ghosting the Crowd.” The idea behind investment crowdfunding remains powerful: Open the door to entrepreneurship and investment for everyone. But if that door leads to silence and broken promises, trust will disappearand with it, a promising financial innovation. A tiny tweak to the rules could restore that trust. Without it, investors will keep getting ghosted. And the market might ghost them right back. Andrew A. Schwartz is a DeMuth Chair of Business Law at the University of Colorado Boulder. This article is republished from The Conversation under a Creative Commons license. Read the original article.
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E-Commerce
In March 2024, Bill Anderson, pharma giant Bayers CEO, wrote an op-ed in Fortune vowing to bust bureaucracy, slash red tape, and eliminate layers of middle management to create a more agile and innovative enterprise. Our radical reinvention will liberate our people while cutting 2 billion euros in annual costs by 2026, he wrote. I wrote soon after that what Anderson was doing wasnt genuine transformation but had all the telltale signs of transformation theater: a false sense of urgency calling for drastic action when none is needed, a rushed strategic process (with little or no time for analysis or dissent), and a large, premature public rollout. Today, more than a year later, Bayers stock remains near all-time lows and investors are increasingly frustrated and its not hard to see why. Anderson went into an organization that was already reeling and introduced even more stress and disruption, with predictable results. If you want to create genuine transformation, you need to start by creating a sense of safety. The Disruption Mindset By publishing his manifesto in Fortune just nine months into his tenure, Anderson was following the advice of many change gurus: create urgency. Burn the boats. Announce the plan loudly and publicly so theres no turning back. Thats the disruption mindset. But was that really necessaryor even helpful? The problems that Bayer faced had been building for years. Its 2018 acquisition of Monsanto made it liable for billions of dollars of lawsuits related to the herbicide Roundup, which is thought to cause cancer. The firm had been building up debt for years and it had long been clear that patents of blockbuster drugs, such as Xarelto, were set to expire. None of this was a secret to anyone. As Anderson himself noted, the stock price had fallen by half during his tenure and was at a 20-year low. Its also not clear how a reorganization would address those problems. Litigation and debt dont immediately disappear just because you eliminate middle managers, nor does it help discover new drugs to replace expiring patents. Consider what the last few years have been like for a typical Bayer employee. First came a massive restructuring after the Monsanto deal. Then came years of public headlines about lawsuits, debt, and falling performance. And now, a new CEO storms in and announces hes eliminating thousands of jobs and redesigning every role and process in the company. Would that make you feel liberated, as Anderson put it? Or terrified? The Truth About Disruption And Performance A key rationale underlying the disruption mindset is that it promotes creativity and innovation. Undermining the status quo, the logic goes, creates space for the new and different. Yet there is little evidence that this is an effective approach and much that suggests a disruptive environment impairs creativity and innovation. In Cultures of Growth, Stanford social psychologist Mary C. Murphy points out that disruption impedes the growth mindset that is so necessary for supporting an innovative culture. In particular, she cites Amy Edmondsons research on psychological safety, which indicates that fear inhibits learning. She also points to laboratory experiments that suggest that performance goals impede working memory, a key component of creative thinking. One thing that you begin to notice when you spend a lot of time around people who perform at a world-class level is that they are more prone to anxiety. So when you shake things up, youre most likely to rattle the very people you can least afford to lose and who can most easily leave. Bayers business is, on a certain level, fairly simple: As long as it produces a steady stream of breakthrough discoveries, things will go well. But once that dries up, it becomes very tough to make money. Sustaining that flow means attracting and motivating exactly the kind of smart, ambitious people who are most vulnerable toand least tolerant ofdisruptive management. Stability Fuels Innovation My friend Whitney Johnson has argued passionately for the need to disrupt ourselves. It is only through venturing out of our comfort zones that we can explore new things, gain new skills, and push our boundaries. Thats what makes the difference between mediocre also-rans and truly top performers. Yet when we had Whitney on the Changemaker Mindset podcast, I noticed something interesting. Whenever she reached a juncture where she needed to disrupt herself, she always mentioned her husband. As we discussed the pattern further, it soon became clear that it was the love and support from her husband that provided the safety and stability she needed to continually disrupt herself. Whitneys not alone. We all need a sense of safety if we are going to take risks. Thats why, when IBM was on the verge of collapse, Lou Gerstner made sure his first trip was t IBMs famed Thomas Watson Research Center, not to demand results, but to reassure the scientists that he was committed to supporting their work. When Alcoa was at a similar point, its new CEO, Paul ONeill, made his commitment to safety, not profits. Many would say that all sounds nice, but naive. The real world is hard-nosed and cutthroat. Yet both Gerstner and ONeill were seasoned leaders, not wide-eyed idealists, and both took failing companies and transformed them into record-setting profitability in a short time. They did it not by disrupting their organizations, but by making them feel safe enough to embrace change. Creating Safety In 1997, when Clayton Christensen first published The Innovators Dilemma and introduced the term disruptive innovation, it was a clarion call. His key insight was that, under certain conditions, the basis of competition in an industry shifts, and the strategies that once made incumbents successful can suddenly make them vulnerable. Yet what Christensen didnt anticipate was how seductive the idea of disruption would become. Soon, all manner of punditsmost of whom never read his book or understood his conceptswere preaching the gospel of disruption. Before you knew it, everything had to be disrupted all the time. But the truth was, we werent disrupting industries, but disrupting people. The unfortunate reality is that when most leaders talk about disruption, theyre not thinking about business strategy but elevating themselves. Disruption becomes a personal brand. A way to feel bold, daring, and visionary. Yet while they are glorifying themselves, theyre making things harder for everyone else and theres a cost to that. Genuinely visionary leaders know that disruption and safety go hand in hand. The safer you make your organization, the more you empower your people to think boldly, take risks, and explore new territory. The more stress you create, the more you drain cognitive capacity, limit creativity and shrink the space people have for insight, collaboration, and original thinking. To truly lead an enterprise, you need to empower the people in it. You do that by building trust, which can only thrive in an environment of safety and well-being. If you want bold action, you need to create a space in which it can thrive.
Category:
E-Commerce
You had a whirlwind romance, and it was glorious. It started with a sun-drenched walk along a sandy beach and a frozen margarita from a swim-up bar. Your skin glistened, and the breeze smelled like citrus and pure freedom. You felt light, present, and unstoppable, remembering what it was like to laugh, breathe, and to finish a sentence without checking your email. Email? Whats email? Youre ready to become a full-time luddite with great skin. That radiant, unplugged, full-of-life version of you was your Out-Of-Office Self. And you fell hard. Head over heels. Ready to propose on the second date and elope on the third. But now the honeymoon is quite literally over, and youre staring at a suitcase that despite incredible advances in technology still wont unpack itself. Your inbox has needs that you have no desire to meet. Your manager wants just a quick sync. And the Slack and Teams pings seem to have unionized. God help us all. Now you’re sitting at your desk with post-vacation whiplash, wondering how to reconnect with Professional You without ghosting your Out-of-Office Self . . . or setting your laptop on fire. Welcome to the post-vacation breakup. Here’s how to survive it. Step 1: Honor the love you shared Dont pretend it didnt happen. You shouldnt sprint into your first day back like you didnt just spend a full week napping at noon, sipping something cold under an umbrella, and avoiding adult responsibilities. Your nervous system has a transition period, not a toggle switch, and its time to adjust. What this looks like in practice: Block off the first half of your first day back. Seriously. Decline meetings. Mute notifications. Give yourself 90 minutes of soft reentry to check your calendar, read your emails (then reread them), sip water like its a coping mechanism, and even stare into the void. Your brain needs to stretch before the sprint. Step 2: The first few meetings are like awkward post-breakup coffees Youre not the same person who clocked out the other week to catch a plane. You tasted freedom, and it was delicious. Five-star Michelin level. And now? Youre back on Zoom, nodding politely while someone goes way too deep on a conversation that absolutely couldve been an email. Deep breaths. Its okay to feel weird, annoyed, and wondering if you should have just bought a coffee shop and moved to that tiny coastal town. What this looks like in practice: This one is going to be tough, but resist the urge to swoop in and take charge. Dont offer to lead the meeting. And for the love of all that is holy, do not start volunteering for projects. Yes, youre good at jumping in and want to be helpful. But the impulse to come in hot is just a reflex to try to reassert control, show you still matter, and that youre back. You are good at your job, and a week or two away doesnt change that. Channel your vacation yogi and take a breath. Then ask questions like, Can you catch me up on where this stands? and let others do the talking. Stay curious and quiet. This isnt about avoiding responsibility, its about not steamrolling the lightness and clarity youve newly acquired. Step 3: Be emotionally honest (without sounding like a vacation martyr) No one loves the coworker who returns from paradise and starts every sentence with In Mexico . . . But pretending your soul didnt just taste oxygen? Thats not it either. What this looks like in practice:Say: Im back and catching up, trying to give myself some space so I can be useful by Thursday. Ping me if somethings urgent. You dont owe anyone an Oscar-worthy performance, just a human update. Because you are, after all, human. Shocking. Step 4: Dont go back to your situationship Time for some real talk . . . the version of work you left behind? It may not be the one worth recommitting to. Vacation doesnt just offer rest. It provides much needed clarity. The late-night emails, overscheduled Tuesdays, and projects that keep getting reprioritized might not be your forever match. And thats totally okay. What this looks like in practice:Sit down (coffee optional, but recommended) and ruthlessly audit your calendar. That standing 10 a.m. meeting? Maybe it can be async work. Truly reclaim your lunch break. And no, eating a salad while skimming a presentation doesnt count. Let one bad habit die so something better can live. Step 5: Let your OOO self leave a toothbrush (and maybe some pajamas) You dont have to choose between Vacation You and Work You. The goal shouldnt be a breakup but integration. What this looks like in practice:Keep one habit from vacation alive and thriving. Ten minutes of quiet coffee before inbox doomscrolling. Midday walks, even if it’s just pacing around your kitchen. A weekly Vortex of Creativity block on your calendar for deep work. Your OOO self had some (maybe not all!) good instincts, let one or two stick around. This isnt a breakup. Its a reunion You dont have to erase Vacation You to function at work. You just have to reintroduce them to each other. Vacation Self, meet Work Self. Hey, we both like coffee. That seems like something we can build a relationship from . . . Let your team meet the slightly softer, more present version of you. Let your calendar witness you . . . rest. Radical, I know. Youre still smart. Still capable. Still valuable. Even if you’re emotionally unavailable for the first 48 hours back.
Category:
E-Commerce
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