The impact of Equity crowdfunding over small businesses
You may have a business idea which may look very good on paper, potentially it can prove to be highly successful. But still, one question which concerns many entrepreneurs is, “ From where or by what means do they raise the fund from?”.
Entrepreneur’s getting denied of bank loans is becoming a familiar story nowadays. So what’s the other alternative that they are provided with? Is there really any alternatives?. The answer is “yes”.
This is where the concept of “Crowdfunding” comes into play nicely.
The go to solution of late
The crowdfunding reward based concept came to the rescue reasonably well. Kickstarter has to be given the majority of the credit for familiarising reward crowdfunding. Even indiegogo has done well for that matter. However, Reward Crowdfunding doesn’t lay emphasis on ROI ( Return on Investment). The crowdfunding is striving towards ROI recently with equity Crowdfunding being greeted by investors of various classes.
On the contrary, here the crowd or the investors will be provided with the equity shares of the company. To be concise, they will be an active shareholder of the particular venture. It applies and goes well even with nontechnical companies and projects as well.
Moderation of stipulations
The primary reason, for “Equity Crowdfunding” to be received well has definitely got to be the fact that now even non-accredited investors can buy shares in a particular company. Earlier, this concept worked with several restrictions, with the classification of investors as accredited and non-accredited being the first curtailment.
Only accredited investors were treated as legitimate enough, to whom one can sell their shares. Accredited investors are said to be people whose net worth and income are relatively high. High enough to meet the standards set. This makes it possible to find a large number of investors without scrutinising too much on their financial state of affairs.
It’s all-important role in the betterment of the small business.
Since there is no prerequisite as far as the non-accredited investors are concerned, its opens up various options for resources that small businesses desperately needs. It can also help companies with proven records of profitable returns, if they are finding it hard to procure bank’s assistance, they can still find many willing investors lining up to buy their shares simply going by the company’s reputation.
Also, it’s important to remember that equity crowdfunding holds good with non-technical companies also. You can come up with any sort of business plan, all you need is a transparent and a clear-cut design to be able to provide a justification of why should the crowd invest in your venture.
The deciding factors
As mentioned earlier, one should be as explicit and transparent as possible, find a better stance to explain the potential benefits and returns that their business can offer. There should be an effective communication strategy to make things easier for understanding. If an organisation find themselves compliant with these factors, they are giving themselves a good chance of roping in new investors as well. Eventually, you can see the graph going only way and that is forward.
The ready-made solution:
If you are in an idea to kick-start your own Equity crowdfunding business then you don’t have to go too far with an idea of developing your website from the scratch, there are plenty of Equity clone scripts available in readiness from which your business would be up and running in no time. Also, You can afford to thrive on the luxury of customizing it instantly.
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