Startups

Does crowdfunding work for early stage growth companies?

This is a guest post by Christopher McDemus of MCD Law Partners a law firm specializing in startups and technology businesses, as part of our Guest Contributor Week. Want to have an op-ed or feature you’ve written to appear on TP, now or in the future? Drop us a line. Disclosure: MCD Law Partners is a sponsor […]

This is a guest post by Christopher McDemus of MCD Law Partners a law firm specializing in startups and technology businesses, as part of our Guest Contributor Week. Want to have an op-ed or feature you’ve written to appear on TP, now or in the future? Drop us a line.
Disclosure: MCD Law Partners is a sponsor of Switch.

 
I guess crowdsourced funding or “crowdfunding” – as it seems to be known – has reached mainstream now that The Wall Street Journal (article), Knowledge@Wharton (article), TechCrunch (article) and The Economist (article) have all written articles on the topic.  The earliest article I found regarding crowdfunding was a Times article from 2008, so the concept is still relatively new.
By now, most people understand the concept of crowdsourcing and if you combine that concept with trying to raise money for something then you’ve got crowdfunding.  It’s a collaborative way to fund a project.  Given that the average amount crowdfunded appears to be somewhere between $2,000 and $10,000, I’d suggest that crowdfunding slides into the financing continuum somewhere around the “friends and family” level – generally the financing stage during which you are looking for smaller amounts of capital for market research or proof of concept.  Although $2,000 to $10,000 would still be small even by friend and family round standards.
Read more at VC Deal Lawyer

Engagement

Join our growing Slack community

Join 5,000 tech professionals and entrepreneurs in our community Slack today!

Donate to the Journalism Fund

Your support powers our independent journalism. Unlike most business-media outlets, we don’t have a paywall. Instead, we count on your personal and organizational contributions.

Trending

What internet speed do you really need?

How DC protesters are protecting themselves online while calling out the Trump administration

Developing tech for government agencies? Participant advisory councils can help get it right.

Penn Center for Innovation celebrates 10 years

Technically Media