Crowdfunding becomes newest way to secure business capital
COLUMBIA, SC (WIS) - The Internet, boredom, and a credit card can be a bad and costly combination for some, but what if there was a way you could walk away from your computer with more than just a blanket with sleeves?
How about an equity share of a legitimate business in your community?
The biggest barrier to starting a small business often comes down to having capital, either in the form of investors or just cold hard cash. That's why now, small business advocates are using technology to help connect investors with opportunity.
Wade Sellers had a dream, but he just needed $4,200 to get it out of his head and onto film.
"We must've done something right because we met our goal and about 10 percent and we were able to make the film," said Sellers.
Sellers did it with help of dozens of online donors who had a little faith in his project.
"They're people who are looking to have a serious stake in something new," said Sellers.
Frank Knapp from South Carolina's Small Business Chamber of Commerce boils it all down to risk vs. reward.
"Everything has risk, of course," said Knapp. "With risk, you get high returns."
"Anyone will be go onto a portal that will have a list of businesses that are seeking investors and anyone can go on literally and say, 'I want to invest in that business," said Knapp.
Investors can purchase an equity share of any sized business from coffee shops to high tech ventures or they can choose to simply donate towards a business project.
"Investors like this who might know your reputation or your product might be more apt to invest for a percentage of the share," said Scott Linaberry from Curtis Hanger Partners.
For Linaberry, who's aiming to raise $4 million to renovate an historic hanger, finding funding from like-minded partners is not just a way to increase his own bottom line.
"When it's narrowed down by projects in your region, and you want to see Richland County or the Midlands grow, here's your opportunity to put your money where your mouth is," said Linaberry.
The small business investment portal will officially open for business before the end of the year. But they are accepting applications from entrepreneurs who are trying to grow or start a business through crowdfunding.
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