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Will the Real Crowd Funding Model Please Stand Up?

document Crowdfunding

Martin Zwilling, Contributor I provide pragmatic advice and services to entrepreneurs and startups. ENTREPRENEURS 8/24/2012 @ 5:06PM |

Will the Real Crowd Funding Model Please Stand Up?
The new hot topic for entrepreneurs these days is crowd funding, which is anticipated to at least supplement, if not replace, the slow and mysterious process of current Angel and venture capital investors. The problem is that crowd funding means something Image via CrunchBase different to everyone, and even I have been confused by the different ways the term gets used. So I have set out here to outline and offer some practical advice on the many different models currently used with the term “crowd funding” and “crowd sourcing.” The newest model was passed into law recently via the JOBS Act, and won’t even be available until the end of this year or maybe mid-2013 in the USA, while waiting for the rules to be finalized: Startup equity crowd funding. This new model will allow large numbers of “regular” people to invest small amounts each online to fund early startups. This is not a get-rich-quick vehicle for consumers. As a current Angel investor, I can attest that any investments in startups are more risky than the commodity markets, and you shouldn’t expect to see any return for five years. Proceed at your own peril.

Read full article at: http://www.forbes.com/sites/martinzwilling/2012/08/24/willthe-real-crowd-funding-model-please-stand-up/

Description The new hot topic for entrepreneurs these days is crowd funding, which is anticipated to at least supplement, if not replace, the slow and mysterious process of current Angel and venture capital investors. The problem is that crowd funding means something different to everyone.

Tags: Angel Investors, Crowdfunding, Equity Crowdfunding, good cause crowdfunding, ideas crowdsourcing, intellectual property, Open source, rewards based crowdfunding

Posted by Claire Mackay

Aug 25, 2012 02:27 am GMT Viewed 625 times

Author: Martin Zwilling Source

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