Funds are Usually Brought Into a Business In the Following Order:

1. Individual personal assets – the money and assets you invest or pledge as collateral.

2. Family and friends personal assets. – the money and assets your friends and family pledge as collateral.

3. Crowdfunding – people from across the USA or the world who may invest in your business.

4. Angel Investors – talented accredited investors who may invest in company.

5. Banks and credit unions – SBA loan.

6. Private equity/venture capital, accredited investors, strategic partners, and investment firms.

Number 3, Crowd funding is usually used in two different ways:

One

The funding of a company by selling a small amount of company equity to a high number of investors. The drawback on selling smaller equity portions of a company is that it takes great effort

Two

The combined effort of over the internet networked friends who work together by combining financial, intellectual, and other social contacts to support efforts of either people or organizations.

Crowd funding is often used to support lots of

– Citizen journalism

– Disaster relief

– Software development

– Missionary service

– Movies

– Political campaigns

– Scientific research

– Seminars, (marriage)

– Startup company funding

– Support of local schools, boy scouts, etc.

History of Crowd Funding

The first internet crowd funding was used to fund a rock band without the band being aware of it. Since then this grass roots method of funding has financed the recording and financing in many areas of business other than the recording business including music, movies, and more.

Recent Uses

Groups have raised money in recent memory for creative work such as journalism, independent films who cannot get funding elsewhere, and for some start up companies.

Crowd Funding Philanthropy

As transmitting money over the internet has gained more acceptance philanthropic opportunities have expanded. Instead of the PTL Club on TV saying, “Just send us X,” donations can now be made in seconds via the internet by using a debt or credit card.

Other opportunities include:

– Giving Global who allows potential givers to browse donors to view lots of opportunities worldwide.

o Some donations areas can include donations to help stop animal cruility, building wells in Africa, hurricane victims in Japan, build non-profit schools in the rural areas of Columbia.

– Microcredit type lending is a type of crowd funding opportunities in developing countries around the world. Microcredit type loans are an important credit source in India where individuals can borrow as little as $20 to start a very small business such as hair collecting to create wigs.

Legal Concerns

Originators of intellectual property ideas who are interested in crowd funding are vulnerable to others infringing on their ideas because there is very little they can do to protect their ideas.

Association

The Crowd Funding Professional Association (CfPA) (http://crowdfundingprofessional.org/) held its first Crowdfunding event in Salt Lake City, Utah, USA In 2012. If the reader is interested in crowd funding becoming a member of this association and signing up for their newsletter is a good first step. At present the first year membership is free.

Constant Funding Questions

The first questions that must be answered in crowd funding are:

– What amount of money is need?

– What is the money needed?

– What will the money be used for?

– What are the current results?

– What results are expected from the funding?

– Are you willing to give up some equity?

– If so, how much equity are you willing to give up?

– If the funding is provided in the form of a loan how will you pay it back?

In short those who invest through Crowd Funding ask the same questions every investor asks:

– How much do you want?

– When will I get it back?

– What is my return?

Dr. Brent Lundell owns http://www.GainStreamGroup.com, a venture capital sourcing and consulting company, and is a partner in The Guinn Consultancy Group, Inc. The Guinn Consultancy Group provides a wide array of business services, including seminars, webinars, and venture capital sourcing services. See the group website at www.theguinnconsultancygroup.com or contact them for additional information at 800-335-9269.

Dr. Brent Lundell owns http://www.GainStreamGroup.com, a venture capital sourcing and consulting company, and is a partner in The Guinn Consultancy Group, Inc. The Guinn Consultancy Group provides a wide array of business services, including seminars, webinars, and venture capital sourcing services. See the group website at www.theguinnconsultancygroup.com or contact them for additional information at 800-335-9269.

Author Bio: Dr. Brent Lundell owns http://www.GainStreamGroup.com, a venture capital sourcing and consulting company, and is a partner in The Guinn Consultancy Group, Inc. The Guinn Consultancy Group provides a wide array of business services, including seminars, webinars, and venture capital sourcing services. See the group website at www.theguinnconsultancygroup.com or contact them for additional information at 800-335-9269.

Category: Finances
Keywords: Finance,Business Funding,Venture Capital