Monday, 21 July 2014

Equity Crowdfunding Startups: The Pros & Cons

Equity Crowdfunding Startups: The Pros & Cons

Equity Crowdfunding Startups

Tessa MacDougall of Fundrazr discusses the rapid growth of crowdfunding and weighs in on the pros and cons of equity crowdfunding startups.

Equity Crowdfunding Basics
Rather than ‘thank-you’s’ or perks for crowdfunding campaigns, equity crowdfunding
consists of actually buying a percentage of a company in exchange for
funding. This allows everyday people access to investments in startups,
which has traditionally only been available to accredited investors and
investment firms. Because of the risks associated with these
investments, many countries are working on regulations to protect
investors, most of which are expected to be approved within the next

Because of these new rules affecting the startup fundraising
landscape, it is important to analyze different pros and cons of equity
crowdfunding. Although there is heated discussion about why it should or
shouldn’t be allowed, there is a variety of valid positions on either
side of the debate. Here is a short list of some of the many arguments.