Dienstag, 2. April 2013

Go Hand-In-Hand

by Jason Best and Woody Neiss

According to the Kauffman Foundation, the largest foundation dedicated to promoting entrepreneurship, approximately 565,000 businesses were started in 2010, with 31 percent of new businesses begun with less than $5,000 in capital. The foundation further reports that the average capital required for a small business is $80,000, with 10 percent of startups forgoing outside financing altogether. 

In our soon-to-be-released white paper, we calculate the market for new business financing from external capital sources at approximately $40 billion dollars annually. Given these figures and assuming a five-year adoption timeline for crowdfunding, as was the case for e-commerce, we estimate that five percent of business ventures will seek financing in the Crowdfund investment marketplace by 2017. We also project that new businesses will demand $4.3 billion in funding in year one and $59.6 billion by year five from the Crowdfund investment marketplace. 

Crowdfunding will be one of the most transparent, efficient and necessary investment channels in the future. Each company funded will create jobs. Therefore, funding more companies translates to a greater number of jobs created. Customers become investors and have a vested interest in the success of a company and become brand evangelists. This is only now possible because crowdfunding democratizes access to capital, something we can all celebrate. View the full important text