Crowdfunding-The New Mother of Angel Investors
Discussion
What are the pros and cons of crowdfunding? Look at it first from the perspective of the entrepreneur who needs the money Look at it also from the side of the potential investor. What are the risks that each might face? Is crowdfunding a good option for them, or is it mainly a way for the owners of the crowdfunding sites to make money for themselves?
Problem Solving
(a) As a potential investor, you want to take advantage of crowdfunding to put some excess cash to work. Investigate at least three possible crowdfunding sites that might use, with one being Kickstarter. Which would you choose and why?
(b) As an entrepreneur who needs money for a new start-up, you want to take advantage of crowdfunding. Investigate at least three possible crowdfunding sites that you might use, with one being Kickstarter. Which would you choose, and why?
Further Research
Perform additional research to learn more about the status and implications of Kickstarter, Angel-List, Indiegogo, and other crowdfunding sites. Does one seem to have advantage over the other? Is the "no equity" model of Kickstarter proving more popular than the "with equity" alternatives legitimated by the JOBS ACT? Quick industry analysis. Who's doing what, why, and with what results? What does the future hold for crowdfunding as a financing alternative for small start-ups and entrepreneurial ventures? After considering the JOBS Act and the crowdfunding industry as a whole, what advice would you offer to small investors attracted to crowdfunding as a way of becoming venture capitalists?