Pros and Cons
The benefits of crowdfunding should be self-evident:
- It offers a unique funding mechanism.
- Typically, you do not have to repay people with cash.
- It offers you immediate feedback on the viability of your idea; bad ideas don't get funded.
- It creates word-of-mouth advertising.
- It also creates a built-in customer base of people who liked your business enough to invest in it.
The downsides are:
- Depending on the site, you may gain traction, but not enough traction.
- People may steal your great idea once they see it posted online.
- Significantly, there may be legal issues to navigate. Soliciting investments from the public is something regulated by the Securities and Exchange Commission. Check with the site and your attorney regarding this possibility.
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