If you havenâ€™t been in business long, it can be tough to qualify for a loan. Lenders want to see a detailed business plan, backed by income and cash flow statements, that prove youâ€™re a good risk. Often strict lending requirements can freeze out new businesses when they need funding the most.
Crowdfunding offers an exciting funding alternative for businesses. Originally the domain of filmmakers, musicians and artists, crowdfunding is now used by start-ups and business owners to raise capital, based on a simple notion: large amounts of money can be raised in small amounts from numerous donors via the Internet.
Crowdfunding allows businesses the freedom to raise capital from investors, customers, colleagues, peers, family, friends â€“ even strangers. Like anyone in search of funding, successful campaigns rely on a solid idea and a detailed business plan â€“ including financial forecasts and cash flow statements â€“ to convince potential donors itâ€™s worthwhile to support your venture.
Typically, an established crowdfunding platform, like Kickstarter or peerbackers, is used to promote a campaign page, with incentives for donors in the form of rewards or equity. A reward might be pre-order of a new product, or services offered in exchange for funding support; equity would be a share of stock offered in exchange for capital.
The below article is a list of the crowdfunding sites in the U.S.