Equity Crowdfunding for Startups

Image source: Brian Merrill / Pixabay

The Fastest, cheapest way to take your Startup Public

It’s tough to raise money from your friends and family to finance your startup. You’ve got visions of greatness and that look of money in your eyes. Your sales pitch is full of excitement and dreams. Convincing your friends and family, however, only some of whom may be able to afford or envision your dream, is a scary proposition. Then comes the caveat to them — I have an idea but no product yet!

After you’ve gone that first and most logical fundraising route, you start going after angel investors and venture capital (VC) guys. Doing a pitch to VCs is daunting at best and usually a waste of time.

When you start looking for money from Joe Average, you will find that you need term sheets and other regulatory documents. The most important thing is investors must be accredited and qualified, meaning they are vetted according to SEC regulations that they can afford to lose the investment if it goes south. They must have a larger than average net worth and a good six-digit income before they can be accredited. You can’t break the SEC rules with this one!

A lot of us have used Kickstarter to raise money or support a startup by buying a product before it’s been released to the public. If you invest in an…