Is Crowd-Funding for you?
from Experian (1 of 3 Credit Reporting Bureaus) 24 Feb 14 enhanced by Peter/CXO Wiz4biz [ Note: Experian has a good side – their Business Info Services ]
What is Crowd-Funding? What makes your new business crowd-fund-able? What benefits does it offer, compared to conventional capital sources? Is crowd-funding right for your business? Or could it be just another passing fad? “Crowd-funding provides a promising alternative for new businesses seeking capital,” said Karlene Sinclair-Robinson (@KarleneSinRob), private business consultant and author of the book “Spank the Bank”: The Guide to Alternative Business Financing (2013). “It provides benefits to both the entrepreneur & the investor unavailable through traditional funding sources.”
Crowd-Funding — also called Crowd Financing, Crowd Equity or Crowd-Source funding — involves raising capital for a particular project via small contributions from hundreds or even thousands of individual participants. The concept has been around since the 17th century, when it was used to raise money for early book printings, but it took the Internet to make it a viable, worldwide phenomenon. Crowd-funding websites started to appear in the early 2000s, but it wasn’t until Kickstarter launched in 2009 in response to the Recession of 2008, that these types of websites became more mainstream. To put it into context, about $5 billion were raised via Crowd-funding in 2013 alone, according to CNN. That’s almost double the $2.7 billion raised in 2012.
“Hundreds of Crowd-funding websites are now online”, says author Sinclair-Robinson. “Some sites are strictly local. Some are regional. And some are national. If you’re planning to crowd-fund — or invest in a crowd-funded project — you need to pick the platform that best suits your needs.” When it comes to crowd-funding, products are much better than services, the Author advises. “People want to invest in something they can see or touch,” she explained. “If you’re trying to launch a service, perhaps you fund it by selling a book related to your venture.”
[ What makes Crowd-Funding so attractive to Businesses? Advice on how to get Crowd-Funding for your new Business in Premium Content ]