Monday, June 2, 2014

Equity Based Crowdfunding Websites and Platforms vs Reward Based Crowdfunding

The world of "crowdfunding" has come a long way since the term was coined in 2006.  Crowdfunding websites helped companies and individuals worldwide raise US$89 million from members of the public in 2010, US$1.47 billion in 2011 and US$2.66 billion in 2012—US$1.6 billion of the 2012 amount was raised in North America. In 2012 more than one million individual campaigns were established globally and the industry was projected to grow to US$5.1 billion in 2013. (Wiki: Crowdfunding)

Although regulations on crowd-funding are hefty, some websites are combating the regulation and creating viable means for start-up companies to raise capital. Below are a list of websites that allow companies and entrepreneurs to raise "equity" financing:
The following is a list of "reward based" crowdfunding: 
  • GoFundMe
  • IndieGogo
  • Give Forward
  • Fundly
  • Crowd Rise
  • KickStarter
While there are many more crowdfunding websites, this is a short list to head you in the right direction.  Some of the most interesting developments in crowdfunding, which are expected to grow in the months and years ahead, include: investment crowdfunding (becoming a shareholder in a company), localization (funding focused on participants in specific cities and neighborhoods), mobile solutions, and group-based approaches.

The JOBS Act that was passed in April of 2012 paved the way to investment crowdfunding, but the JOBS Act Rulings by the SEC have yet to be fully implemented to formally kick the market off. Expect big movement and activity in this area in 2014. (Forbes)

Currently, equity crowdfunding is only open to wealthy investors, or those earning more than $200,000 a year or with a net worth greater than $1 million. However, the SEC recently proposed new rules that will permit companies to raise money online from virtually anyone. If the rules are enacted and the pool of potential investors expands, a flood of companies may turn to equity crowdfunding as a way to raise capital, creating even more opportunities for investors both large and small. (NerdWallet)

Do you have experience in crowdfunding??  Share your thoughts, comments and constructive info in the comment section below. 

Hope this was helpful

The MicroCapCompany Team
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About the Author: Nicholas Coriano is a Business Consultant and Planning Guru.  He is a graduate of The University of Connecticut Business School and the John Marshall Law School in Chicago.  He has worked at Merrill Lynch, The New York Stock Exchange and as an Investor Relations Agent & Consultant to Micro Cap Companies and Penny Stocks.  He is the founder and author of The a blog focused on providing information and advice to Micro Cap Company Executives and Investors.  You can also find him blogging about Social Media, SEO, Web Development and Tech on

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