Crowdfunding of Small Entrepreneurial Ventures

In summary, equity crowdfunding ushers in a fresh and enhanced way to aid entrepreneurs and investors achieve their objectives. The challenge is weighing the influence and dynamics of crowdfunding, evolving market trends, dormant regulatory and ethical concerns, stakeholder considerations, and accomplishing the goals of both parties while balancing integrity and tenets. Investors and entrepreneur believe crowdfunding is an exemplary method of raising capital. It represents an opportunity to increase revenue, cultivate an entrepreneurial ecosystem, enter an emerging industry, and create jobs. Vigilance and education play a significant role if equity crowdfunding is to remain sustainable for many years to

This document is authorized for use only by Rachel van Munster in Entrepreneurial Law and Finance taught by Rafael P. Ribas, at HE OTHER from February 2015 to March 2015.

With nearly 80 percent of all new business startups failing, entrepreneurship has proven itself to be a great risk in this economy. The book A Raisin in the Sun points out essential flaws and weaknesses in many venture capitalists’ thinking. A Raisin in the Sun exhibits a man named Walter

Crowd funding is an alternative method available to entrepreneurs aiming to gain money to finance their business enterprises. Kickstarter is a popular website that helps aspiring inventors and artists find investors to fund various projects. It is often difficult to find a single investor to help finance a project, and crowd funding can help alleviate the need for a single investor. Crowd funding allows many financial backers to offer relatively small amounts of money to aid the development of new products and ideas. In an effort to ensure success, potential entrepreneurs must fully understand the functions of Kickstarter, capitalize on the advantages of crowd funding, and provide adequate information to gain the desired level of

Crowdfunding is also recognized as crowdsourcing capital. The aim of this report is to investigate three crowdfunding platforms to make a recommendation on whether to utilize this way of fundraising and if so, an

My experiences at the Demo Day solidified my fascination in the ecosystem of startups and venture capital. Unlike software where objects are definite and fulfill specific conditions, entrepreneurship represents an exciting uncertainty where success can be defined in myriad ways. However, due to the inherently uncertain nature of startups, a recurring theme among the startups I met was the need for funding to convert their dreams into realities. As the Demo Day ended, I determined that although creating a startup would be exhilarating, I want to become a venture capital investor. I decided that these innovators shouldn’t have to be concerned with funding and that becoming a venture capital investor would allow me to remove their limitations and join them on their paths to success.

Another viable source of capital able to support both high tech and social ventures at the moment of start-up, and even in later stages, are private and public grants (Atherton, 2012). Nevertheless, social businesses might experience some advantages in gathering grant capital. In fact, their social mission is a source of legitimacy (Mair and Martì, 2006; Dacin, Dacin and Matear, 2010; Teasdale, 2010) and it allows to obtain preferential terms from traditional grant makers such as philanthropic foundations, corporations and government agencies and attract new funding from individuals either through high net worth individuals and grass roots campaigns (Dees and Dolby, 1996; Dees, 1998). It follows one new hypothesis:

Loten and Neddleman (2011) researched Cupcake Suite Cupcakery, an example of an existing business that used crowdfunding. The bakery influenced people to donate money by rewarding them with sweet treats. “Cupcake Suite Cupcakery, a New York start-up wholesale bakery founded by three cookbook authors, last fall raised almost $9,000 in part through a crowd-funding platform to help offset the cost for a planned new location. Any contributor who provided at least $25 got a half-dozen whoopie pies” (para 5). This bakery experienced a successful crowdfunding campaign to fund their expansion. The bakery influenced contributors by offering whoopie pies as a gift for donating money.

In the event, however, we decide to secure a small business loan, the SBA (Small Business Administration) offers a loan guarantee up to $750,000, or 75% of individual loans made by private investors. While this sum is much too high for our start up, we do not necessarily have to request the most money possible. However, the SBA loan guarantee should be used as a last resort, as we must first show that we cannot obtain funding using conventional methods with reasonable terms. We must also offer a personal guarantee for the loan, and demonstrate a sufficient cash flow to repay the loan.

Venture Capitalists are a company or wealthy individual who is prepared to invest in a young or new business . Obtaining Venture Capitalist finance can be highly beneficial to a small business as it may be able to acquire a large amount of capital, of which would not have been possible through other methods of finance, such as a bank loan . Venture Capitalist investment is further financially viable as a business is not obligated to repay the investment it receives. This method of finance is based upon the investor’s decision to take a risk on a business in anticipation of its success. In addition to its financial beneficence, acquiring this form of capital can provide a small or new business with valuable business expertise, as investors are able to provide key advice and guidance as well as industry connections. Making better decisions can be vitally important for a business’ growth .

Start-up investment is characterized by a high degree of information asymmetry between the entrepreneur and the investors. To obtain a positive return, investors need to accurately assess both the qualifications and ability of an entrepreneur. They also need to accurately assess the potential of the entrepreneur 's idea. Traditional institutional investors are professionals who have the expertise and experience necessary to evaluate potential investment opportunities. These

Crowdsource funding, or crowdfunding, is a way to raise money by asking large amounts of people to each invest or donate a small amount of money to a project. Crowdfunding giants such as Kickstarter, provide online platforms for entrepreneurs to advertise and gain traction on their innovative ideas. This has allowed many self-made entrepreneurs to bring their ideas to life. Kickstarter is appealing to small businesses because it cuts out the middleman (the banks); entrepreneurs no longer need to take out business loans to fund their projects. Instead, they

First and foremost, we needed our monetary sources mapped out to overcome the financing gap many small firms face. The £10000 of savings of the entrepreneur was taken as the start-up capital to finance

financial help from the general public (the “crowd”) instead of approaching financial investors such as business angels, banks or venture capital funds. This technique, called “crowdfunding”.

A small business with no revenue, no track record and no sales screams high-risk. Luckily, there are other pockets to pick to help your small business get the financing it needs to grow and thrive .In these essay want to explain about other potential sources of financing for Jacqui LLC . And I explain about the advantages and disadvantages of using equity capital and debt capital to finance a small business's growth. And I give for Jacqui Rosshandler to investment offer from Arthur Shorin.