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How Crowdfunding Can Launch Your Startup

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How Crowdfunding Can Launch Your Startup

By Startup Valley (631 words)
Posted in Crowdfunding on August 12, 2014

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When the JOBS Act was signed in April 2012, it expanded the reach possibilities of crowdfunding-based investments. Entrepreneurs and investors will no longer be limited to donations or reward-based programs. Rather, they will be able to take full advantage of equity-based investing on a crowdfunding platform. This means that crowdfunding can reap all the benefits of large business investment. Investors earn equity rather than rewards, and startup companies can accept large sums from angel investment groups as well as individual contributions. If you are in the process of developing your own tech startup, these changes mean that crowdfunding can help you launch your business to the next level. Equity crowdfunding brings you publicity, investors, and control that was unheard of before the JOBS Act.

You Remain in Control
Before crowdfunding, investors had the right to demand changes that met their bottom line rather than yours. But when you accept investments through crowdfunding platforms, your creative business plan does not need to answer to anyone else. By putting your model online, investors are choosing to invest based on those ideas alone. They do not have the right to request changes or require you to modify your ideas to meet their goals.

Free Publicity
Crowdfunding platforms will help you save money on advertisement by doing that footwork for you. Websites like KickStarter are free, giving you ample space on the internet to create your platform and essentially advertise it on their website. Your business will be right in the middle of the public eye, giving social media and online voices easy access to your business model, your fiscal goals, and your investment opportunities. From there, you can direct the public to your page through free social media accounts like Facebook, Twitter, and Tumblr. Once your startup becomes recognizable and investments start pouring in, the bloggers and online magazines will take it from there. With free publicity, your funds and your time will be freed up for more important business affairs.

No Ties to the Bank
Crowdfunding does not have interest rates, due dates, or any of the other collateral that banks require when you take out a business loan. Crowdfunding, in and of itself, eliminates the need for a loan entirely. You will not need to worry about approaching a bank with your business model and hoping for the best, and you will not have any hefty loan payments hanging over your head as you start your business. You will not be limited to only the funds you received through the bank because, with equity crowdfunding, anyone can invest in your startup.

Large Investment Audience
Because anyone can invest in your startup, using crowdfunding platforms significantly widens your pool of investors. ClickStartMe, KickStarter, and other crowdfunding websites are easily accessible all over the world at any time of day, bringing your business right to the people whenever they want. Large groups of angel investors can access your business model, and average citizens with a passion for business can also become emotionally and fiscally invested in your plan. What was originally limited to banks and large investment firms, crowdfunding has expanded to everyone. This increases your odds of success by giving you access to investments you would have been unable to reach previously.

Crowdfunding is the modern way to invest in new businesses in the 21st century. By succeeding through these online platforms, your credibility will soar. Your business will be seen as a marketing success, and more investors will be interested in supporting and helping your startup grow. Launch your startup by visiting some of the most popular crowdfunding platforms online now, like KickStarter, Indiegogo, and Peerbackers. Many of these websites offer advice and access to legal guidance to help you understand this new investment scene and increase your odds of success.

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