3 Questions with Gene Massey

FintekNews is pleased to feature our second interview in our weekly feature – 3 Questions.  Each week we will profile a different fintech thought leader, and ask them to answer just 3 questions for our readers, in their vernacular.  This week, we’d like to introduce you to crowdfinance entrepreneur and pioneer Gene Massey.

Gene Massey
Chairman/CEO
MediaShares
http://www.MediaShares.com
[email protected]

How did you personally become involved in fintech?

In 1998 I told my attorney friend that I had invented a new way to finance movies. I called it “fan-financing.” It was very simple I told him, “we’ll pre-sell copies of a movie to finance the movie.” But my attorney friend told me “you can’t do that, because you’re selling something that doesn’t exist, therefore it’s a security subject to SEC rules.”

I did not know at the time that he was giving me bad advice (Kickstarter did it eight years later), but I came back the next day with a new idea: “we’ll sell a share of stock and give a video as a dividend.”

He laughed. “Forget it,” he said. “It’s too complicated and you’ll never figure it out.”

Fortunately, I did not take that advice, and instead pursued my idea of “fan-financing” movies by selling stock in small increments to movie fans, and I even filed for, and was issued, a U.S. business method patent, #6,792,411 for my methodology. However, I really couldn’t figure out how to do it at first, because the SEC rules were so restrictive for IPO’s that it was very expensive and practically impossible.

Cut to 2012 and the JOBS Act finally made it possible to have a small IPO with less cost and certain key exemptions.

So 18 years later we’ve finally figured out how to sell single shares of stock efficiently to movie fans to finance a movie. Furthermore, what we’ve learned can be applied to any business with fans, customers, users, or affinity groups, so MediaShares now works with all types of companies, helping them to get the funding they need through stock offerings on the Internet.

What are the biggest problems facing the fintech industry in the future?

The single biggest problem facing the Fintech industry is restricting an investor from investing because he or she is not a millionaire. Only accredited investors, or millionaires, are allowed to invest in certain securities. This is done to “protect non-accredited investors, because if you’re not a millionaire you don’t have enough sense to invest in certain offerings.”

If you are not a millionaire, the SEC considers you to be too stupid to invest in more risky offerings, and wants to “protect” you from losing your money. This kind of idiotic thinking is comparable to preventing anyone under 6’4” from walking down a street because there are some tough guys on that street and you might get beat up unless you are really tall. The government wants to protect you from getting beat up so no one under 6’4” can go there! Suppose I’m 5’10” and I’m a black belt? Would that be okay? NO! You’re too short! How about a sign that says, “Tough guys on this street – watch out!”

Imagine if all of the non-accredited investors in the U.S. (the other 97% of all investors) could invest in anything! Wouldn’t THAT stimulate the economy? Okay fine, have a sign that says “VERY RISKY INVESTMENT” – no problem, but don’t restrict me by telling me I’m too stupid just because I’m poor. I truly believe this is unconstitutional and restricts many of us unfairly from life, liberty and the pursuit of investing.

What do you think of the future of fintech in the coming years?

I am actually a supreme optimist and I believe that we are on course for some incredible, wonderful changes. But these changes will take time. In 1930 only 8% of Americans had refrigerators. The rest had “iceboxes.” The ice truck came periodically and brought a big block of ice and put it in your icebox to keep your food cold. It lasted a few days or a week and then they brought another one. In 1940, TEN YEARS LATER, only 33% of Americans had gotten a refrigerator. A refrigerator even made its own ice but 66% of the people still had an icebox! Why? It takes time for people to change. Everyone is afraid of change. Betty Davis turned down “Gone With The Wind” because she didn’t know how she would look IN COLOR!

So Fintech will eventually change the world, enable companies to get the capital they need, with less regulations, with investments from anyone, and even on their own websites, but it will take time. I await those glorious times…

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Gene Massey is the CEO of MediaShares and its subsidiary, QwikShares, companies offering innovative CrowdFinance solutions for marketing and transacting online securities offerings. MediaShares licenses its U.S. Patented methodology, system, and software to issuers to facilitate CrowdFinancing Public Offerings.