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How Equity Crowdfunding Will Benefit Modern Day Entrepreneurs

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How Equity Crowdfunding Will Benefit Modern Day Entrepreneurs

By Startup Valley (341 words)
Posted in Equity Crowdfunding on June 14, 2013

There are (1) comments permalink

Crowdfunding has fundamentally changed the way new businesses get funded. Instead of asking the bank for a loan, it asks everyday people to pitch in a few dollars each to see their idea make it to market. In exchange, each donor receives the company's product free of charge. However, the equity crowdfunding model is going to revolutionize the traditional method of seeking startup funds when exchanging securities.

Each Donor Becomes an Investor

Instead of receiving a free watch or t-shirt, each donor is entitled to an equity stake. In other words, crowdfunding becomes an investment vertical and not donation based. This will have a significant impact on investors as well as business owners, not to mention when an investment is made, the investor gains certain tax advantages that donors do not have.

Find Investors Who Can Help Your Company Succeed

Not every investor is going to be the ideal match or an enthusiast who trusts that you know what you are doing. There will be people and organizations that have ties to help your company grow. After all, if the business grows, the investment becomes more valuable. These individuals can help the business gain the knowledge it needs to be a successful company after it has secured initial financing.

Leverage Your Social Networks

Developing relationships is critical in the business world. By building a loyal following via social media, those supporters can potentially convert into customers. Over time, these people will become the biggest advocates. As your company grows and matures, these followers will be a large part of the success.

Equity crowdfunding is going to change the way business owners get their ideas off the ground. Instead of going to a bank or to a family member, the business owners can go to the people in the “crowd.”

Comments (1)

Richard Rodman, CEO Crowdentials posted on: June 25, 2013

I think one of the most relevant parts is leveraging your network. Having multiple investors that are well connected in the space is invaluable for a startup and can be the determining factor between success and failure.

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