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Crowdfunding as a tool to raise capital

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The Jobs Act of 2009 introduced Crowdfunding as a useful tool to help entrepreneurs raise capital for new and existing businesses. There is no limit to the capital you can raise but you must be realistic because there is a timeline involved that you set and the project must be viable to the platform you are using to raise capital.
There are three platforms used to raise capital:

1. Donations/Rewards
2. Debt
3. Equity

The most popular platform for small businesses is the Donations/Rewards style. With this platform an entrepreneur would ask for donations in exchange for offering a reward. The other two platforms Debt and Equity are reserved for the more sophisticated entrepreneur and they must be in compliance with the Securities and Exchange Commissions (SEC) rules. But do not be discouraged with the last two platforms for they have been very successful in raising hundreds of millions of dollars in capital. Check out this article from Globe Street.

The first step to raising capital through Crowdfunding is to create an effective pitch. This is a very critical role for it requires a lot of creativity and persuasion to reach your funding goals in the time permitted which is set by you and you need to reach your goal or the various Crowdfunding sources such as Go Fund Me, Indiegogo and others will enact their own rules to measure the failure or success in you reaching the benchmark you established for your campaign.

To get through this critical (creating your pitch) step it would be wise to review your pitch by use of words and video to see if your business is fundable. With this being said there is an online business finance source called The Business Finance Store which offers a variety of free services for businesses interested in using Crowdfunding, but just need some guidance to help them ease through the initial process. The Business Finance Store can help you create an effective pitch through word and videos so that interested donors will take a serious look into your venture.

For more information about valuating your chances of raising serious capital visit the Business Finance Store online.

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