Category Archives: Crowdfunding

Should you use crowdfunding to help finance your business?

Should You Use Crowdfunding to Help Finance Your Business?

Starting a small business can be costly, but did you know that you can use crowdfunding to help alleviate some of those costs?

Our latest infographic, “Is Crowdfunding Right for Your Small Business?,” shows what types of crowdfunding are available and the different benefits of each.

In 2018, the United States alone raised $1,038,000 in crowdfunding. This amount is expected to show an annual growth rate of 10.4%, resulting in a total amount raised of $1,298,000 by the year 2022. From a global perspective, that amount is even higher – China raised $7,463,000 in 2018!

What Types of Crowdfunding Are There?

There are three types of crowdfunding options available for your business: reward-based, equity, and debt.

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Crowdfunding rules are changing to meet small business needs.

Have you considered crowdfunding for your small business but thought it was too complicated or too risky? Did you think it was just an option for one-off projects instead of long-term business sustainability? As crowdfunding gains popularity, more options are becoming available for small- and medium-size businesses.

Crowdfunding is growing beyond rewarding perks to friends and strangers who donate to your efforts. Now, thanks to a new law, regular-Joe investors can get a piece of your company’s equity pie.

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SEC allows regular Americans to become venture capitalists via equity crowdfunding.

Startups can now raise up to $50 million by selling stock online to anyone, opening the door for Internet-based equity crowdfunding platforms to begin operation.

The Securities and Exchange Commission voted unanimously on Wednesday to adopt rules that permit startups to raise money from the vast majority of Americans, including provisions that allow for deals to be made over the Internet.

Previously, only individuals with more than $1 million in net worth or income of at least $200,000 for each of the last two years — so called “accredited investors” — could easily invest in startups. Some websites already offer the chance to invest in startups online, but prospective investors had to be accredited and subject to more stringent regulations.

“This is overwhelmingly good news, as it opens up a new path for small private companies to raise money directly from their communities, customers, and followers, and a new way for members of the general public to invest in startups, local companies, and new kinds of investment without being ‘accredited investors,'” said David Pricco, editor of CrowdExpert.com in an email to Mashable.

Just how many people might be interested in dropping money on a startup is the subject of some debate, but the World Bank projects that the worldwide equity crowdfunding market will hit $93 billion by 2025. Crowdfunding investment platforms are now active in countries around the world.

Read the whole story by Jason Abbruzzese on Mashable.

Are you thinking about crowdfunding your business?

Crowdfunding is the new frontier for financing projects and businesses, allowing you to reach into the pockets of more people than ever before. Say you’ve got a brilliant idea but don’t have the start-up money to get it off the ground—learn exactly how crowdfunding can help your project take off, while understanding the do’s and don’ts of the business. Learn more

Listen to SCORE’s Crowdfunding podcast.

The SCORE Small Business Success Podcast features interviews with the best and brightest in the world of small business, covering topics such as business plans, financing, marketing, human resources, SEO, social media and more. In this podcast, SCORE mentors chat with Maryann O’Neil and John Montelione about crowdfunding.​

Click here to listen.