Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing.
Equity funding is just one source of funding for your startup. There are many others such as crowdfunding.
There are several forms of crowdfunding such as crowdfunding with prepayment, crowdfunding from non-accredited investors, and crowdfunding from accredited investors.
Crowdfunding prepayment lets you pre-sell your product before you build it.
This works best for physical products that require funding for the design and manufacturing of the product.
It’s a great way to test the market for a new product as it provides customer feedback on the product, price, and promotion.
There are several platforms available for showcasing your product.
There’s also crowdfunding from non-accredited investors. On these platforms, anyone can invest in your startup. It is for equity, so you need to understand the implications of it on your cap table.
Finally, there’s crowdfunding from accredited investors which is no different than raising funding through angel investors and venture capitalists. The only difference is using a crowdfunding platform to find and engage the investors.
There are a growing number of crowdfunding portals offering both general and specialized sites.
Crowdfunding works well for startups with a product that is clear to grasp and easy to understand.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.
Let’s go startup something today.
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Hall T Martin is the director of Investor Connect, which is a 501(c)(3) nonprofit dedicated to the education of investors for early-stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon for the basis of investment decisions.