Small Business Trends: Crowd Funding Your Next Entrepreneurial Venture
This article outlines the basic concept of crowd funding, links to a recent Wall Street Journal article and to crowd-funding and peer-funding websites.
“Over the past few years, as the credit crunch tightened, we’ve all heard horror stories from successful entrepreneurs who had growing businesses but couldn’t get working capital, or saw their business lines of credit cut or their loans called in for no reason. No wonder many small business owners have become leery of traditional financing sources.
For small business owners seeking capital in a tough economy, will crowdfunding prove to be the next big thing?
Crowdfunding has some similarities to the peer-to-peer lending sites, such as Prosper.com, that arose several years ago, but some important differences as well. Both types of sites allow individuals to solicit financing from others for any purpose. But while peer-to-peer lending typically focuses on one individual lending to another, crowdfunding—as its name implies—aims to reach a funding goal by getting many investors to put in small amounts.”
