What Small Business Owners Need to Know About Crowdfunding

What Small Business Owners Need to Know About Crowdfunding

Guest Post from Emily Lazration, CoverWallet

More and more people are starting their own business, whether it’s to pursue a lifelong passion or to escape the monotony of an office job. Whatever the reason is, starting a business is an exciting endeavor. However, it involves a lot of hard work and determination. It also usually requires a significant amount of money which some may not readily have; this is one of the main reasons why someone may not be able to start their own company.  But there’s no need to worry because there are different ways to get funding. You might be considering lending firms or bank loans, or even dipping into your own savings. But another good financing option for a small business is crowdfunding. This will pool small amounts of money from a group of investors to fund a service or project. Crowdfunding can be done easily through an online platform or even in sites designed for social networking.

Interested in crowdfunding? Here are some things you need to know:

What are the different types of crowdfunding?

Crowdfunding comes in two types: rewards-based and equity.

What are the advantages of crowdfunding?

If you have a new and compelling business concept, plus willingness and determination, you’re one step closer to making your idea a reality. There’s no need to stress out about financial resources because there are various approaches to raising funds, and one of them is crowdfunding. Here are some of the benefits of crowdfunding:

How do you stand out from the crowd?

With so much competition out there for investor attention, it can be hard to stand out. Something that can really help is having business insurance. This will show investors that your business venture is legitimate and should be taken seriously. Here are some basic policies to consider:

Crowdfunding has been a go-to approach for many who need more funding for their small business. It’s an effective tool but bear in mind that it may not be for everyone. For instance, access to some crowdfunding sites comes with a fee, and some sites have an all-or-nothing rule, where you won’t get to keep any money unless you meet your funding goal. Despite the caveats, crowdfunding can be a great place to start to help get your business off the ground or expand to the next stage of growth.

Emily Lazration is the Content Marketing Specialist at CoverWallet, a tech company that makes it easy for businesses to understand, buy, and manage insurance- all online and in minutes.


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