The Pros and Cons of Crowdfunding for Your Startup

Thanks to popularizing platforms like Kickstarter, crowdfunding rose to prominence.

These days, it's become a viable option for giving your startup a running start.

⚠️ But that doesn’t mean there are no caveats.

For one, it’s a public affair.

Meaning it becomes challenging for startups to bounce back if their crowdfunding efforts fail.

So before considering crowdfunding…

Here are 3 pros and cons to consider:

✅ Your business becomes exposed to thousands of potential investors.

✅ Centralized system for managing every investor.

✅ Avoiding preferential investor terms.

❌ Presents the risk of appearing like a 2nd rate company.

❌ Difficulty standing out against the competition.

❌ Inaccessibility to deal structuring—certain investors might get blocked out.

Additionally, crowdfunding might affect later funding rounds.

Some VCs believe crowdfunding is “where good deals go to die.” 📉

However, things have changed.

In fact, prime crowdfunding networks are selective with their investors.

For instance, sites like Propel(x) and Angel Investment network only allow accredited investors.

All in all, with proper research, crowdfunding can be a potential avenue for startup investment.

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