Tuesday, December 9, 2014

Crowd funding groups offer opportunities to minority groups, investors and the needy

[caption id="attachment_22092" align="alignleft" width="480"]African-American owned business African-American owned business[/caption]

Marsha Hunt----Over the years minority groups and women have long struggled to gain a foothold in the world of business.  In a world that for many years has been dominated by men with money, mostly white, having an opportunity to work for oneself, or to develop a lasting business, has been difficult for those coming from behind.  On the other hand, in recent years there have been new organizations and agencies that have developed ways to increase opportunities for those who haven't had them in the past, and the following is one of them.

An annoucement was made in 2013 by Crowdfund Mutual (www.crowdfundmutual.com) to launch January 2014 what they define as "a rewards-based crowd funding platform, focused on uniting communities sharing common values."

They went on to describe the background for the formation of this venture as this:  "In January 2014, the long overdue rules enacted by the 2012 JOBS (Jumpstart our Business Startups) Act will be in full effect. The Securities and Exchange Commission, after 18 months of sleeping on the job, recently issued the long awaited proposed rules that would allow small businesses to use crowd funding portals to sell interest in their ventures in order to raise capital.

Why is this critical to business across America? Crowd funding gives entrepreneurs in communities that have historically been over looked by Venture Capitalist and Angel Investors, such as women and minority owned, as well as Hispanic and African American businesses, an opportunity to fund start-ups and raise capital for high-growth companies that would not qualify for traditional funding."

These new rules in place are said to allow new businesses to raise up to $1 million in capital from a broader pool of support, investors who are allowed to provide funding through crowd funding portals.

"Communities that are not participating in today's alternative financing environment and instead taking a back-seat or standing against the wall are doing themselves a great disservice," said Kimberly N. Evans, Crowdfund Mutual CEO.

But rewards-based platforms that only offer some type of non-financial reward in exchange for a monetary donation won't provide sufficient motivation for continuance.   That's how Crowdfundmutual.com says it differs as the corporation says it "will offer an upgraded platform later in the 3rd Quarter of 2014 to "include equity and debt financing options."

Crowdfunding's successes and ability to secure both the interests of business and the public have made a great contribution in the economy.  At the same time, the funding activities and organizations, in reaching out to the general public, has snagged a volume of people of disparate interests and limited needs that from time to time can overcome the system as it occurs in social media.  People who have a struggling online newspaper online site request funding, sometimes largely for overhead that exceeds the usual and customary salary and profit of profitable newspaper enterprises.  Others may seek funding for a book that contains good ideas, and the particular dreams and ideas of the author that may or may not rise to the level of funding needs.  On the other hand, crowd funding groups have allowed people with serious illnesses to pay medical expenses they otherwise could not manage.  So there is both a positive result of these funding efforts, as well as a downside where the individual attraction may be more for the greedy than the needy.

But like every new venture, it's always good to do a through investigation of a resource like this and observe a track record before becoming too involved at the outset, still this new opportunity, if successful, can provide wide opportunities for many people who have been left out.

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