21
Jun

Part 1: Crowdfunding Basics

Crowdfunding
Crowd funding or crowdfunding is a term we’ve been hearing a lot lately, especially as it relates to funding new business startups or supporting causes that matter to you. It describes the collective effort of individuals who network and pool their money, usually online, to back efforts initiated by other people or organizations. Essentially, crowdfunding connects “crowds” directly to those who need funds.

So, what are the pros & cons of using crowdfunding? Oishii weighs in:

Pros:
• A low barrier of entry for both entrepreneurs and investors alike.
• A shift to smarter and more creative ideas gaining access to capital; it’s not just the rich getting richer or “who you know”
• More, better ideas are coming to market.

Cons:
• Fraudulent and potentially crazy ideas could be funded
• Investors don’t always have access to proper due diligence to properly understand all the risks associated with the investment
• Entrepreneurs have less skin in the game and investors have little retribution

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