Some Pros and Cons of Crowd Funding
/Extracted 05MAR2012 from http://www.smallbusinesscrowd.com/news/finance-und-insurance/pros-and-cons-of...
Pros:
Crowd funding take advantage of the social nature of the crowd and not only allows you to get money from, but also as your crowd spreads the word about your needs, it will essentially also be spreading the word about your business. It is important when starting a crowd-funding campaign, that you are clear about what your small business stands for and has to offer. Many people will then be willing to contribute because they are interested in your products or because it fills a particular need. This way you can also measure how responsive your future clientele will be to your business and get an idea of initial demand.
Crowd funding is not a solution for every business model and is not considered to be a sustainable source of revenue. It takes a lot of work and is based on having a pre-existing audience or being able to gain one in a short amount of time. Moreover, because it deals with the collection of money and soliciting investments, you have to be extra careful not to violate any existing laws or regulations, i.e. securities laws.