Crowdfunding For A Start-up With New Tech? You Bet!
Looking at raising money for a start-up or any new tech is, to put it mildly, hair-raising. There are so many options such as bootstrapping, angel investors, VCs or begging friends and family. There is also another way called crowdfunding, and this is how you can raise money in a fairly low risk way. So, let’s explore how you can raise money for that new tech while you’re still in university.
By now you’ve heard the buzz “crowdfunding” flying around the internet. It’s actually a concept that’s as old as business itself. It’s basically what happens when your family and friends donate money to you. That’s a type of crowdfunding called donation crowdfunding like you’d find on Kickstarter or Indiegogo. With this type of crowdfunding people give you money for your ideas, but they have no guarantee or financial reward for doing so. This means that getting people to donate to your business fund can be fairly low especially if getting your services is dependent upon your raising enough money. If you want more of a real investment, but want to stick with the crowdfunding route for your startup, take a look at equity crowdfunding.
To peak more interest you may want to offer something in return. This is called equity crowdfunding, and it can go a long way in terms of raising money, branding and getting a firm start on the process. Equity crowdfunding can work for nearly everyone that has something to offer, which if you are in business, you have something to offer. You can offer products, services and most importantly stock options for your investors.
Now, the equity crowdfunding model isn’t for everyone as there are a few rules to follow. Equity crowdfunding is a platform that works with accredited investors and legally established small businesses with a plan. This is great for both the investor and the entrepreneur because both parties have assurances that are present in the old style of investments.
There are additional bonuses, too, for both sides. The crowdfunding-style platform allows for both investors and entrepreneurs to shop around for their best match in interests, styles and future directions. It’s like a marketplace for investors and business people to meet and greet as well as make business deals.
Whichever style you choose, crowdfunding is a great way to give your new tech startup the financial boost it needs.