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A trip to the bank or the keyboard?

Traditional financing methods for small business and startups continue to be a hard nut to crack.

Here's an informative study from an analyst at the Cleveland Fed and a scholar at Case Western  about the sluggish small business lending environment. For startups the financial situation is even more challenging, bank loans are often not available at all, which is my more and more startups—especially the ones that plan to make a product—are turning to crowdfunding campaigns.

You’ll find a lot of information about the process at Entrepreneur Magazines site.

Keep in mind that most crowdfunding arrangements are not equity based, in other words you are not asking people to invest in your company and expect a continued return.  Usually some sort of good or service is exchanged if the goal is met, ranging from a handwritten thank you note, to swag like a company logo t-shirt, up to receiving one of the products the company will offer.  The Pebble watch is a famous example.

New rules for Equity Crowdfunding were recently released by the U.S. Securities and Exchange Commission, but this is a much more complicated process.

If you’d like to learn more about the background and basics of crowdfunding in more detail, these books from  our collection may be helpful:



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