02 Oct Crowdfunding Beyond Money
Crowdfunding is an excellent business financing avenue. Business owners are able to raise money directly from regular people who are more approachable than venture capitalists and angel investors. Before Crowdfunding hit the scene, business owners could only raise money through licensed broker dealers and accredited investors. This means that the investor would need to have a net worth of over $ 1M in addition to their home or make over $200 000 a year. Crowdfunding broke down those limits by allowing people from all walks of life with any amount of money to invest in any idea they deemed fit for as low as $1 dollar. This has brought about the war between traditional investment and Crowdfunding.
To raise money through Crowdfunding, one would need to create a campaign using one of the hundreds of platforms available online. Have a look at the Top Crowdfunding websites. The most famous of these sites is Kickstarter which has helped entrepreneurs fundraise over $500 million dollars since inception. There are also sites which follow traditional investment guidelines of having broker dealers and working with accredited investors. As the SEC finalizes their regulations of the Crowdfunding industry even more platforms will be launched allowing for equity Crowdfunding where investors will get equity in exchange for their investment.
Beyond raising money online, some of these websites or platforms have begun to offer training to prepare their entrepreneurs to raise capital. One of the sites doing this is ProHatch.com. They have a 3 day educational series for entrepreneurs focusing on Crowdfunding information. Another site is Kickstarter which has a “school” that teaches people the basics of Crowdfunding e.g. how to write a pitch, or how to engage an audience etc. before launching their campaign.
Away from training and online education about Crowdfunding, sites like ICrowd are offering entrepreneurs the opportunity to network with peers, mentors and experts through the site.
Finally ProFounder is a site that has been able to fill a great need in the Crowdfunding industry. They have recognized that a lot of entrepreneurs do not have experience on Wall Street and might not know how to make the perfect pitch and that pitching to VC’s and angel investors can be intimidating for business owners. So they have set out to solve these problems by helping the entrepreneurs put everything required for fundraising together and they even stay engaged after funding.
Crowdfunding sites can be more than a place to raise capital. They can be places where entrepreneurs network, meet mentors and obtain advisors to help with the entire Crowdfunding process even the business and beyond. Crowdfunding sits contain a wealth of capital, human resources and knowledge and should not merely be looked at as finance vehicles for businesses and ideas. Entrepreneurs must remember to take advantage of the massive opportunities provided on these platforms to learn and build relationships with likeminded people from across the globe. Crowdfunding platforms are also a great way to give back to the society as one can donate to projects that directly affect their community or country, and they give one an opportunity to make the world a better place by fulfilling the dreams of people around us. It’s more than money. Crowd fundraising is a lifestyle choice; a great way to change the world.
- Steinberg, Scott. 2012. “The Crowdfunding Bible.”
- Ries, Eric. 2011. The Lean Startup: How today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses. New York: Crown Publishing.
- Crowdfunding blogs http://www.crowfundingblogs.com