Is Crowdfunding Equity Right for You?

by | Sep 20, 2016 | Financial Services

Do you have a business venture that you’ve always dreamed about? Have you lacked the funds to get started? Crowdfunding may be the answer you’ve been looking for. With crowdfunding equity you can acquire the money you need to start your business, and be on your way to creating your very own organization. There are some things you need to be aware of, though, if you’re going to take this route.

Crowdfunding Equity – what is it?

Simply put, crowdfunding equity means that investors receive equity in a company in exchange for funds that they contribute. In other words, they will own a piece of your company, until you pay them back what they’ve invested, via payments or profits. This differs from ‘regular’ crowdfunding platforms like Kickstarter, which allows entrepreneurs to retain full control over their company.

Is It Right For You?

So which option is right for you? Straight-forward crowdfunding or equity crowdfunding? Here’s a general rule of thumb: if your company is going to offer a product or service and you need capital the secure the first few orders of manufacturing, then simple crowdfunding is probably all you need.

However, if you need to manufacture your products on a larger scale in order to reach your revenue goals and need more capital, then equity crowdfunding may be a more appropriate strategy. Having experienced investors by your side to give you not only financial support but business advice can help catapult your business to a higher level than you ever thought possible in a short period of time.

Choosing a crowdfunding platform

Once you’ve decided which crowdfunding option to go with, you’ll need to choose a platform. There are several to choose from, but they are not all created equal. Your best option is a platform that has experience and knowledge behind them, such as Colonial Stock Transfer Company, Inc. Choose wisely, as this can make or break your crowdfunding campaign, and in turn, your business venture.

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