KCSourceLink Small Business Opinion Panel: Crowdfunding
Crowdfunding – the use of small amounts of money from a large number of people to finance a new product, venture or business – has quickly become a hot topic among entrepreneurs and business owners (especially in light of the SEC’s change of heart on general solicitations of funds).
In today’s economy, some small businesses are struggling to stay afloat and entrepreneurs are facing financing challenges of their own. Crowdfunding offers these individuals a chance to showcase who they are and what they offer to the world instead of or in addition to traditional funding options.
How do KC business owners feel about crowdfunding and its future?
In Q3 2013, we asked our Small Business Opinion Panel about their familiarity with and feelings about crowdfunding.
While not a scientific sampling, here’s what we found:
- 75% of the small business owners surveyed are unaware of or only moderately familiar with crowdfunding.
- 55% of those that are familiar with crowdfunding are uncertain of its future as a successful way to fund businesses.
How much should campaigns ask for in crowdfunding?
According to our panel, 79% of respondents said that campaigns should ask for more money than is needed for the project.
Pro Tip 1: Know your funding needs.
Matt Cooke, Crowdfund Buzz founder, advises knowing your funding needs for a project and only asking for that amount. Once you reach your goal, you may quickly get to 200-300% of those goals. Aim to hit your goal early, and then go for above and beyond.
Pro Tip 2: Offer something tangible.
Cooke has seen that sectors or products that offer something tangible tend to do well when compared to those that do not offer a backer something tangible. Most of our panelists agree.
What types of funding are available to businesses and startups?
Crowdfunding may not be a viable option for all businesses or startups. Business owners need to be aware of other funding options, several of which are available for every type and stage of business.
- Angel Capital Group
- Invest Midwest Venture Capital Forum
- Justine PETERSEN Microloan Program
- Mid-America Angels
Have questions about crowdfunding or other financing options?
Give us a call at 816-235-6500, we’re happy to help connect you to the right resource for your business needs.