Lack of funding is one of the common reasons why bright business ideas stay at the back burner. But this can no longer be an excuse today because there are already plenty of ways to raise funds for a new business venture. Financial institutions and Small Business Organizations are readily accessible to provide assistance for those who need capitalization. There are also Angel Investors that can help fund your venture and give you expert business advice as well. Another option that is becoming more and more popular is Crowdfunding, a fundraising method that makes use of the internet in bringing aspiring business owners and investment hunters together.
There are two crowdfunding models being used today. One is the donation based model where project organizers present their objectives and programs for raising funds and getting pledges or donations from a crowd of supporters. The causes for this type of model can range from social awareness campaigns to disaster relief programs. There are also donation based platforms that promote social entrepreneurship where benefactors can support livelihood programs and get products in return. On the other hand, the investment crowdfunding model allows businesses in need of capital to sell ownership stakes to potential investors. In this model, funders can enjoy the benefit of a potential return of their investment. This is a very attractive way to raise funds for capitalization as businesses need not go through the tedious process of getting a loan. It also provides a wider reach to potential investors for those who have little or no experience in running a business. The beauty of this model is that it doesn’t have any bias in terms of business size and amount of investment. A business neophyte can sell shares for a t-shirt business that he runs at home, and one can already make an investment out of $20. No business or investment is too small for the crowd that supports crowdfunding.
One can easily find crowdfunding platforms in the internet as they have already grown in numbers. Most of them are donation based but there are also sites that focus on business and investment like Crowdfunder, Somolend, and AngelList. You simply have to find the site that best suits your venture.
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