Entrepreneurs
can now raise money for their projects online thanks to websites like
kickstarter.com, indiegogo, com and others. Reward-based crowdfunding is very
popular, in that supporters get a reward based on the level of their
contribution. It can be anything from a Thank You, to a T-shirt, to a prototype
of the item.
If
you would like to seek funding for your project this way, there are a number of
things you want to check out. Among them are possible federal and state tax
consequences. There is no fun getting a tax bill when you least expect one, so
plan to keep meticulous financial records. And, of course, make sure your
offering details are clear and concise. Hint: the websites offer lots of
practical tips and guidelines.
If
you’re thinking this is something you’d like to do, a good place to start is by
subscribing to some of the sites and studying the various campaigns. You’ll
soon have a pretty good idea of what this crowdfunding thing is all about.
Hint: It’s not a small deal. These sites are raising hundreds of millions of
dollars from interested supporters!
So,
there you have it. In addition to the classic friends and family approach that
underscore so many startups, here is a new, proven way to launch your dream.
Good luck!
Martin
Kahn, Certified
SCORE Mentor
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