How would you like to try your idea on someone else’s dime? It sounds crazy doesn’t it? Believe it or not it is possible thanks to this amazing thing called crowdfunding. A couple months back while on a fantastic internship with my local Chamber of Commerce I had the opportunity to go to a connections luncheon. I’ll talk about internships another day, for now we are going to talk about what happened at the luncheon itself and how I learned several crowdfunding tips and how teens can use crowdfunding to finance their next business idea.
I got to hear speak and then talk personally with Elton Rivas founder and CEO of One Spark. Now first of all before I get into what I learned we need to make sure we all know one thing. What the heck is crowdfunding? Half of you probably know this already, the other half are going to be really glad that I’m giving you a definition.
Crowdfunding, “The use of small amounts of capital from a large number of individuals to finance a new business venture”. (www.investopedia.com)
Crowdfunding definition two, (for those who don’t like big words, “Crowdfunding is, borrowing with no guarantee of return a small amount of money from a lot of people to see if your business idea will actually work.” Says me.
So, now that we know what it is… should you use it? There are really two approaches to this question. One, I answer the question. Two, someone with a lot more experience answers. The unanimous decision was, ask the smart one. So, what does Mr. Rivas have to say?
“Crowdfunding is the best thing that ever happened. You get to see whether or not your idea works with someone else’s money.”
And I have to say, it doesn’t get much clearer than that. Crowdfunding is a great opportunity for entrepreneurs of all ages. Crowdfunding is very low risk for all parties involved. Since each party involved contributes a relatively low monetary sum they tend to be much more willing to try out your idea. Everyone benefits, if the idea works then great. If not, will you now know what doesn’t work, and no one is out a tremendous sum of money.
Take Lily Born for example. Her grandfather has Parkinsons disease making it hard for him to hold things. Using Kickstart Lily raised over 62 thousand dollars and created a three handled cup, making it easy for her grandfather to hold. Lily isn’t the only young person to successfully use crowd funding. Let’s look at how *You* can take advantage of this.
Now, believe it or not opportunities abound for you as a small business owner to use this great resource. Here are five simple ways to use crowdfunding.
· Create a website for your company. Once your business has a face it will be a lot easier to sell someone on your ideas. This also gives you some credibility.
· Start meeting people, this sounds like a no brainer but so many people forget. CONNECTIONS ARE EVERYTHING. Intern with a business or chamber of commerce and use this opportunity to make connections.
· Use events like One Spark to show people your business and once again, build connections. One Spark is: “A non-profit committed to fostering environments of creativity and innovation through crowdfunding, and is based in Downtown Jacksonville. One Spark provides an opportunity for people with great ideas to connect with the resources they need to make them happen.
(Or you could use a website like these last two.)
· Crowdfunder: “A crowdfunding platform with the mission of bringing capital to early-stage companies while giving investors access to top deal-flow.”
· DesignBook: “A peer-to-peer marketplace for emerging businesses and new products. We connect entrepreneurs, collaborators and investors to stimulate progress in business.”
Where does this leave us? You now know what crowdfunding is. You also have a basic grasp of what you can do with it. Finally you heard of some venues to realistically take advantage of it. A quick recap, crowdfunding is something you should absolutely take advantage of if you can.