{"id":7646,"date":"2016-05-16T13:04:00","date_gmt":"2016-05-16T21:04:00","guid":{"rendered":"http:\/\/associatednews.info\/content\/crowdfunding-for-small-businesses-gets-kick-start\/"},"modified":"2016-05-16T13:04:00","modified_gmt":"2016-05-16T21:04:00","slug":"crowdfunding-for-small-businesses-gets-kick-start","status":"publish","type":"post","link":"https:\/\/associatednews.info\/content\/crowdfunding-for-small-businesses-gets-kick-start\/","title":{"rendered":"Crowdfunding For Small Businesses Gets Kick-Start"},"content":{"rendered":"

By Chris Arnold<\/a><\/span> <\/p>\n

\"President<\/a><\/div>\n
\n
<\/div>\n
\n
\n

President Obama signs the Jumpstart Our Business Startups (JOBS) Act in 2012. Crowdfunding, long used by charities, could become a popular way for small businesses and startups to raise money. Carolyn Kaster\/AP<\/strong> hide caption<\/strong><\/p>\n<\/div>\n

toggle caption<\/strong> Carolyn Kaster\/AP<\/span><\/div>\n<\/div>\n

Starting today, small companies can raise up to $1 million from ordinary investors through what are called “crowdfunding portals.” These portals are different from sites like Kickstarter. As one of the portal sites SeedInvest explains on its website:<\/p>\n

“Kickstarter promises rewards for successful projects in the form of anything that is not monetary, whereas equity crowdfunding, as its name suggests, promises a financial slice of the pie when it comes to startup and small-business investment.”<\/em><\/p>\n

So in other words, instead of just getting, say, a t-shirt, by investing through one of these portals, you get an actual equity stake in a small company that’s looking to raise money and grow. You own a piece of the company. And you can make money by selling that stake down the road if it appreciates in value.<\/p>\n

It used to be that to buy shares in a company that’s too small or young to be publicly traded, you needed to be what’s called an “accredited investor<\/a>.” That means you had to be pretty wealthy.<\/p>\n

But as part of the JOBS Act in 2012, Congress decided there should be a way for ordinary Americans to invest in small businesses or startups too. To protect investors though, there are new rules surrounding the process.<\/p>\n

If you’re a small business owner looking to raise money this way, you have to go through a registered broker dealer or a funding portal that’s been approved by regulators. Some of these new portals include NextSeed, SeedInvest, and Wefunder.<\/p>\n

Of course there are risks for investors. The self-regulatory industry group FINRA (the Financial Industry Regulatory Authority) has posted advice for ordinary people interested in investing in an early-stage company through crowdfunding here<\/a>.<\/p>\n

For businesses, crowd-funding promises to expand the world of options for raising capital. It’s possible that businesses could raise money more cheaply and\/or easily by crowdfunding than through traditional bank loans or professional investors. But, fees appear to be a question mark at this point. If the fees are too high, either for investors or businesses, that might stop crowdfunding from really taking off.<\/p>\n

Let’s block ads!<\/a><\/strong> (Why?)<\/a><\/p>\n

Source:: http:\/\/www.npr.org\/sections\/thetwo-way\/2016\/05\/16\/478255952\/crowdfunding-for-small-businesses-gets-kick-start?utm_medium=RSS&utm_campaign=business<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

\"President<\/a><\/div>\n
\n
<\/div>\n
\n
\n

President Obama signs the Jumpstart Our Business Startups (JOBS) Act in 2012. Crowdfunding, long used by charities, could become a popular way for small businesses and startups to raise money. Carolyn Kaster\/AP<\/strong> hide caption<\/strong><\/p>\n<\/div>\n

toggle caption<\/strong> Carolyn Kaster\/AP<\/span><\/div>\n<\/div>\n

Starting today, small companies can raise up to $1 million from ordinary investors through what are called “crowdfunding portals.” These portals are different from sites like Kickstarter. As one of the portal sites SeedInvest explains on its website:<\/p>\n

“Kickstarter promises rewards for successful projects in the form of anything that is not monetary, whereas equity crowdfunding, as its name suggests, promises a financial slice of the pie when it comes to startup and small-business investment.”<\/em><\/p>\n

So in other words, instead of just getting, say, a t-shirt, by investing through one of these portals, you get an actual equity stake in a small company that’s looking to raise money and grow. You own a piece of the company. And you can make money by selling that stake down the road if it appreciates in value.<\/p>\n

It used to be that to buy shares in a company that’s too small or young to be publicly traded, you needed to be what’s called an “accredited investor<\/a>.” That means you had to be pretty wealthy.<\/p>\n

But as part of the JOBS Act in 2012, Congress decided there should be a way for ordinary Americans to invest in small businesses or startups too. To protect investors though, there are new rules surrounding the process.<\/p>\n

If you’re a small business owner looking to raise money this way, you have to go through a registered broker dealer or a funding portal that’s been approved by regulators. Some of these new portals include NextSeed, SeedInvest, and Wefunder.<\/p>\n

Of course there are risks for investors. The self-regulatory industry group FINRA (the Financial Industry Regulatory Authority) has posted advice for ordinary people interested in investing in an early-stage company through crowdfunding here<\/a>.<\/p>\n

For businesses, crowd-funding promises to expand the world of options for raising capital. It’s possible that businesses could raise money more cheaply and\/or easily by crowdfunding than through traditional bank loans or professional investors. But, fees appear to be a question mark at this point. If the fees are too high, either for investors or businesses, that might stop crowdfunding from really taking off.<\/p>\n

Let’s block ads!<\/a><\/strong> (Why?)<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[19],"tags":[],"class_list":["post-7646","post","type-post","status-publish","format-standard","hentry","category-business-2"],"_links":{"self":[{"href":"https:\/\/associatednews.info\/content\/wp-json\/wp\/v2\/posts\/7646","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/associatednews.info\/content\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/associatednews.info\/content\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/associatednews.info\/content\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/associatednews.info\/content\/wp-json\/wp\/v2\/comments?post=7646"}],"version-history":[{"count":0,"href":"https:\/\/associatednews.info\/content\/wp-json\/wp\/v2\/posts\/7646\/revisions"}],"wp:attachment":[{"href":"https:\/\/associatednews.info\/content\/wp-json\/wp\/v2\/media?parent=7646"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/associatednews.info\/content\/wp-json\/wp\/v2\/categories?post=7646"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/associatednews.info\/content\/wp-json\/wp\/v2\/tags?post=7646"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}