How Can Crowd Funding Help You?

October 26, 2011

If you have never heard of crowd funding (or crowd sourced funding) then you are missing out on one of the hottest opportunities provided to the business world through the internet. Of course, not everyone is going to want to take advantage of such non-traditional funding, but for many people, this may be the only way to bring their dreams to reality. Read on to learn about crowd sourced funding and how it could help you.

If you are a small business or a person preparing to launch a new venture, you may have trouble sourcing traditional funding from sources like banks or venture capitalists. They are often looking for extensive experience and or a tried and true business method that is guaranteed to provide a significant return on investment. Venture capitalists or (or angel investors) are sometimes known to strike out and provide some of the funding for new concepts in the tech industry, but they are unlikely to work with smaller companies.

With so many chips stacked against you, how do you presume you could move forward to bring your dreams to reality? That’s the job of crowd funding. The platform is very simple to understand and provides you a lot of benefits with minimal risks.

Under normal laws governed by the SEC, you must disclose certain bits of information to potential investors, as well as filing a bible worth of paperwork. Crowd funding helps to eliminate most of those troubles, since it isn’t technically a form of investing.

When you launch your project with crowd funding platforms, you request other members of the site to review your concept and provide small amounts of capital to help get the venture off the ground. Since so many people are exposed to your idea, only small investments from each are required. With just a dollar or two from each person reviewing your idea, there is little risk to each individual “investor.”

The best part for you, the business owner, is that you get to have your idea reviewed by many individuals and are able to tap into a much broader range of financial backgrounds than if you were to try to get a loan from the bank or other financial institutions. The benefit for the “investors” is that they are putting themselves at less risk by investing small amounts of cash in many different startups. It may only take one significant result to recoup the loss of several failed attempts. But with the social voting that takes place, it can be easy to identify the potential winners and losers… so crowd funding is a safe bet for those with weak stomachs looking for more ways to invest.

If you want to get yourself off the ground but don’t think you would qualify for many of the traditional funding sources, then consider crowd funding as your number one alternative. There really is nothing else like it that can provide the funds you need to start a company with no existing assets or equity.

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