CROWDFUNDING IS THE NEWEST WAY TO RAISE MONEY for business, real estate, art, film, new products and more. Crowdfunding lets you get money:
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in bite-sized pieces
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from tens, hundreds, or thousands of people at once
DEPENDING ON THE NATURE OF YOUR BUSINESS, crowdfunding may be used for business or real estate.
EQUITY CROWDFUNDING IS A RELATIVELY NEW TYPE of crowdfunding and a welcome alternative to Business Angel or Venture Capital funding. In equity crowdfunding, companies sell actual shares of their business to interested investors.
WITH EQUITY CROWDFUNDING, you can get investors from all around the world to pool amounts as little as $1000 each into your business in return for owning a piece of it—not a bad tradeoff for getting your moneymaking project off the ground.
POPULAR EQUITY CROWDFUNDING PLATFORMS include websites like:
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Angel.co
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FundersClub.com
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CircleUp.com
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OurCrowd.com
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Seedrs.com
THE BEST KNOWN TYPE OF CROWDFUNDING IS REWARDS-BASED crowdfunding, where you give investors or donors a small reward like a free product, a discount, or a small cash return for the money they put into your crowdfunded deal. Equity crowdfunding is different because it involves ownership shares in your company.
EQUITY CROWDFUNDING IS LIKE VENTURE CAPITAL ON STEROIDS. It lets big, serious investors read your business plan and decide to get in on your great new idea.
TO GET STARTED WITH EQUITY CROWDFUNDING, take these steps:
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Write out a description of your business, project, service or product idea.
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Show how much you expect your business to earn over time. Write this information up in the form of financial projections. Read up on venture capital funding to see how this is done.
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Decide how much money you need to raise, at what levels, and what sorts of shares you’ll provide. For example, you could sell shares at $1,000 each, $5,000 each, or more.
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Study the various equity crowdfunding platforms by visiting their websites and see how they work, what types of projects they support, etc.
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Contact an equity crowdfunding platform to help you set up your money raising campaign.
