11 May Understanding Crowdfunding Trends: What This Means for Startups and Investors
We’ve posted a number of blogs on crowdfunding surrounding the different kinds, as well as the good, the bad, and the ugly. But what is the latest on crowdfunding? What are the latest crowdfunding trends, and how exactly do they help entrepreneurs and investors?
One thing is certain and is very clear: Regardless of business or potential investment, crowdfunding is not successful without a detailed strategy.
Where Did Crowdfunding Come From?
Crowdfunding first hit the scene approximately three years ago when Congress first released the Jumpstart Our Business Startups Act, also known as JOBS to give entrepreneurs a chance at working with investors to help fund their businesses and to help investors with their investment strategies and see higher returns, all while boosting jobs and the economy. It was a win for all stakeholders.
However, over the last several years, crowdfunding has broken into a number of different avenues. While startup businesses and investors have seen capital gains as well as higher returns, crowdfunding has also had an impact on the consumer market—assisting every day folks fund their causes ranging from helping sick children in need to weight loss programs to art research projects…and everything in between.
So Where is the Line?
So where is the line between what is considered “acceptable” crowdfunding? This still has yet to be determined. In fact, many crowdfunding firms only work with accredited platforms and investors, meaning those who are legitimately in the game solely for investment and capital purposes.
The second portion of the JOBS Act has yet to be released and defined the rules and policies surrounding crowdfunding. However, we are expected to see a release by the SEC to launch in October 2015.
What Types of Crowdfunding Are Available?
Other areas of crowdfunding, such as equity crowdfunding, debt crowdfunding, and real estate crowdfunding, just to name a few, are all crowdfunding options as well. But, like any form of crowdfunding, these still require a thorough investment strategy in order to ensure success.
Working with a professional and experienced crowdfunding firm can assist both startup businesses and investors with these forms of crowdfunding and can even boost opportunities for all stakeholders. And as crowdfunding continues to emerge and increase in popularity, opportunities are only expected to increase. Accredited investors, crowdfunding partners, and online platforms are all becoming more accessible and available for interested parties.
Finally, working with a reputable and experienced crowdfunding firm who has been in the game since the beginning is more than happy to partner with any business startup or investor who is interested in learning and strategizing how to maximize capital and resources and maximize returns.