Crowdfunding is the latest buzz word in entrepreneurial lending. Fundable is a new company that offers “crowdfunding for startup companies”. Crowdfunding occurs when people network through the internet to raise money to support other people’s ideas or interests. Fundable’s site allows entrepreneurs to raise capital through crowdfunding activities. Fundable’s site states, “Startups create a funding profile that provides an overview of their company, their fundraising goals, and the rewards they are willing to provide potential backers. Thereafter, they reach out to their personal networks as well as the broader Fundable community to enlist their support.”
Backers may pledge money and/or offer assistance. Fundable mixes Kickstarter-style and equity-based crowdfunding. Fundable shares similarities to Kickstarter, in that the process involves all-or-nothing funding. Goals must be met in order to receive the funds and there is no limit to the amount of money that may be raised. Scribd.com explained that there are differences between Fundable and Kickstarter. “Fundable will seek to fund for-profit companies, while Kickstarter is all about creative projects, like literature, movies and the like.”
With the recent push for Obama’s Jumpstart Our Business Startups (JOBS) Act, Fundable may be able to take advantage of the crowdfunding law to solicit funds online from unaccredited investors. However, Mashable explained, “Crowdfunding legislation is so new that the U.S. Securities and Exchange Commission (SEC) hasn’t set rules for it and Fundable needs to be approved by the SEC as a broker/dealer before it can handle investments. In the meantime, the company is focusing on offering rewards-based deals — which makes it look, for the time being, like a less-populated version of Kickstarter.”
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