3 Practical Reasons Why Entrepreneurs Should Consider Raising Money Via Equity Crowdfunding

December 22, 2020
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In honor of the Feds raising the crowdfunding limit to $5M and the record breaking success it has enjoyed this year, it’s fair to expect that 2021 will witness another surge in activity.

Social capital isn’t a requirement

2020 has been a brutal year for business owners, especially those seeking startup funding and seed investments. Compounding the obvious roadblocks presented by the pandemic, is that a whopping 75% of startups and new businesses access funding via social capital. This is such an important point, it’s been deemed “critical” by researchers. Well, no wonder most entrepreneurs can’t feed at the trough and are forced to seek other sources of funding. Lucky for them, the equity crowdfunding ecosystem has been picking up the slack and assisting to fund businesses that need it the most. For folks without a well-connected network, the equity crowdfunding space could be the solution to get them back on their feet, or save their businesses from slipping under.

Power rests with consumers

Successful crowdfunding campaigns tend to rely on marketing to spread awareness, engage consumers and attract early adopters. Consumers have the power to decide what services and products they want to have, not out-of-touch angel investors. By placing the power of decision making in the hands of a larger group of people, the cream tends to rise to the top. More eyes vetting a project is beneficial, and certainly helps in avoiding the embarrassing flameouts of idiotic ideas that we’ve been watching for decades. 

Owners are created

America’s wealthiest 1% own 50% of stock market gains, and the wealthiest 10% own 92%. Yikes to that grim statistic. But rather than fighting over the scraps left over on Wall Street, the equity crowdfunding ecosystem is just a Federally-regulated hop, skip and jump away. Those pivoting to equity crowdfunding have learned that it operates 100% online and offers the average person an opportunity to invest and receive ownership when a company is still young and affordable. Equity crowdfunding makes it possible for both entrepreneurs and  investors to build wealth. And once a local person becomes an “investomer,” their vocal support benefits their entire community. Seems like the myth of trickle down economics is a reality only in the equity crowdfunding sphere. Snerk. Isn’t it ironic, don’t you think?

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