Crowd-funding Your Business Startup Idea
Starting a business requires, amongst other things, capital. If you have an idea for a business startup but don’t have the necessary startup capital, there are always several possible ways to acquire funding. If you are trying to avoid a traditional business loan, crowdfunding has become a modern way of acquiring cash to start a business with the help of others. Crowdfunding is a new way to receive startup cash as well as potentially bring in new customers. The JOBS Act allows crowdfunding to be used by any company to solicit donations or seek investors.
Is my business eligible for crowd-funding?
Different types of crowdfunding are available depending on your business goals. Some companies receive donations while others receive investment funds. If you are offering a product for sale, you may want to ask donations, whereas if you can afford to share some ownership of the company, investment may be appropriate. Of course, even before the need for cash arises, you can use crowdfunding to gauge interest in your company or product.
But people aren’t just giving away money for nothing. You’ll have to create your pitch, whether it is in writing or video form. It also helps to offer something in exchange for their financial support of your business. If you’re unable to offer investment return like company shares, you can offer rewards to cash donors like pre-release versions of your product.
Do I need an attorney to start my business?
Since crowdfunding is a result of new technology and legislation, the laws can be somewhat tricky. If you are interested in using crowdfunding to source business startup capital, it may be best to meet with a business lawyer who can help explain the ins and outs of the law to you.