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Crowd Funding Resources

02/01/2013 Comments off

Here at the SBDC at Wright State University, we field questions on funding small businesses every day.  Included in those discussions, is a regular topic, crowd funding.  While the details are still being ironed out from the JOBS Act legislation and the SEC is figuring out how to regulate this new opportunity, there are still a few options for you to try in the crowdfunding arena. (View a video on crowdfunding from IndiGoGo)

Kickstarter

IndieGoGo

SmallKnot

RocketHub

Fundable

CrowdTilt

There are many others out there with new ones coming online daily.  Some are specialized to a particular industry or cause so, do your research and see which platform fits your business plan.  Don’t have a business plan?  Come see us at the SBDC office!

Here is a story from Mashable on other unique crowd funding websites.

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UpStart Business Journal – Small Business Finance Gets a New Look

10/23/2012 Comments off

Small businesses come in all shapes and sizes, but the need for funding remains constant for all.  With many small businesses having issues receiving capital from your traditional lending sources, it is about time a new model of lending took over.  Enter entrepreneurs.

There is a new wave of small business funding taking over, and the main drivers behind this wave are entrepreneurs.  These new entrepreneurs are taking the old model of lending capital and giving it a major overhaul.  The new model is to loan capital to small businesses based on new data and algorithms not in equity in the company, but on revenue and cash streams.  The old model required a lot of start-ups to give up equity in their company in return for capital, this new model does not require equity, but rather takes their fees and loans out of a company’s revenue.  Three such businesses that have made this model successful are…

1.) Lighter Capital

2.) Kabbage

3.) American Finance Solutions

Lighter Capital focuses their lending on start ups, Kabbage on more Main Street businesses, and American Finance Solutions on merchants.  All three are leading a new trend of lending, and all three have been very successful as of late.  As one entrepreneur who has taken loans with Lighter Capital put it, “When everybody makes money, everybody makes money.  It’s a beautiful thing.”

To learn more from UpStart Business Journal, visit http://upstart.bizjournals.com/

For this full article, visit http://upstart.bizjournals.com/money/strapped/2012/10/09/hold-small-business-finance-gets-a.html?ana=e_du_ubj&s=article_du&ed=2012-10-09&page=all

Crowdfunding – The Latest Small Business Buzz

06/04/2012 Comments off

10 Tips for Crowdfunding – Los Angeles SBDC

Crowdfunding—raising funds from “crowds” of individuals online via websites like Kickstarter and IndieGoGo—has been used to finance thousands of projects, inventions and businesses in the past few years. Now, a provision of the recently enacted JOBS Act, called the CROWDFUND Act, will greatly expand entrepreneurs’ ability to raise money by crowdfunding. Here are 10 steps to successful crowdfunding.

  1. Consult a professional. The CROWDFUND Act seeks to lower the cost of raising capital by exempting companies raising $1 million or less from registering their offering with the SEC. But although you are exempt from registration, you’re not exempt from regulation. Always consult with a professional investment consultant or attorney versed in securities law before embarking on any crowdfunding venture.
  2. Understand the two types of crowdfunding. Previously, crowdfunding sites could be used only to get donations (or pledges). The CROWDFUND Act expands the options by allowing entrepreneurs to solicit investments of up to $1 million annually via crowdfunding websites. Unlike donors, these investors actually own a piece of the company and can realize a return on their investment if the company succeeds.
  3. Don’t jump the gun. The process for crowdfunding donations hasn’t changed, but the SEC regulations regarding crowdfunding investments and nonaccredited investors won’t be set until January 2013. You will be able to crowdfund from accredited investors (those whose net worth, excluding the value of their primary residence, is over $1 million) beginning July 4, 2012, but you will have to wait until after January 2013 to solicit nonaccredited investors.
  4. Research your options. Make sure the crowdfunding site you choose meets the requirements of the CROWDFUND Act. Crowdfunding investments must be solicited through sites that are registered with the SEC, conduct background checks on companies seeking investments, and screen investors to confirm that they understand the risks involved.
  5. Beware of scams. Interest in crowdfunding is high, and the CROWDFUND Act is not yet implemented, which means the market is ripe for scam artists. Be very cautious about anyone claiming they can help you raise capital online for a fee.
  6. Create a compelling pitch. If you’re crowdfunding donations, your fund-raising pitch should focus on emotions and get donors excited about your business, your product or service and your entrepreneurial passion. If you’re crowdfunding investments, your approach should focus on the bottom line and the potential for investors to make money.
  7. Offer rewards. For investors, the reward is the profit they make from your company, but for donors, you’ll need to offer rewards such as product samples, T-shirts or promotional items, or discounts. Develop different rewards for donors depending on how much they contribute.
  8. Spread the word using social media, marketing and PR. Don’t limit your search for funds to the people who frequent the crowdfunding site you choose. Create an integrated marketing campaign that tells everyone you are looking for financing—and makes it simple for them to tell others.
  9. Create a video. Make your company stand out from the pack by creating compelling pitch videos—one for donors and one for investors. Post them on your website, the crowdfunding site and YouTube—and increase your chances of going viral.
  10. Share information. If you crowdfund investments, the SEC regulates how you communicate with investors. Even if you crowdfund donations, you’ll want to regularly update donors on how your company is doing, the progress of your product or service, and any other news that makes them feel part of your success.

Original Article: http://smallbizla.org/2012/10-tips-for-crowdfunding-your-business-may-2012/?goback=.gde_3962903_member_111557010.gde_3962903_member_111714481

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