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How Equity Crowdfunded Businesses will Stimulate Job Creation

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How Equity Crowdfunded Businesses will Stimulate Job Creation

By Startup Valley (431 words)
Posted in Crowdfunding on July 19, 2013

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With unemployment being as big of a problem for Americans as it has been in the past few years, the net creation of new jobs is never a bad thing. Equity crowdfunding is a particularly new development, but it is no doubt going to help with creating jobs. Essentially, equity crowdfunding is used by entrepreneurs and small businesses to raise money. Startups offer shared equity in their company to the public in return for their investments. It’s a win-win for everyone involved. The startup gets the money it needs in order to make sure that their company sees success and longevity, while the investor gets a share and reaps from the company’s success.

The unemployment rate as of July 2013 was 7.6 percent meaning that 11.8 million Americans are without work. Ever since the recession, large companies have been downsizing leaving many Americans that were well into their career jobless and forced to start over. That means young Americans just graduating college are joining a workforce that isn’t looking to hire nearly as many people as it has in the past, making it that much harder to find work. What other choice to do people in these situations have other than to take control? These are the people that will look to start their own business.

People creating small businesses will help with the unemployment issue. It is people creating jobs for themselves and others. It is estimated that new firms create 3 million jobs per year, while already established firms cut nearly 1 million jobs a year. While these firms are creating 3 million jobs when they startup, 65% percent of them do not make it through their first year.

Crowdfunding gives these startups the support they need in order to create a stable business that will keep them employed and many others employed as well. Equity crowdfunding is up and coming. The concept of equity crowdfunding is a new one that is still in the works. While it is fairly new, it has made great strides. The recent proposals of lifting the ban on general solicitation are definitely a good sign for the future of equity crowdfunding. The JOBS Act was also passed with the purpose of creating new jobs in order to revitalize the economy. The JOBS Act makes it easier for investors and small businesses to work together to get the startup on their feet.  Equity crowdfunding is a great resource for entrepreneurs, giving them the encouragement and support they need. 

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