I’m a long-time entrepreneur. In the past, I secured money for business ideas in traditional ways, either from friends and family or professional investors. While funding wasn’t easy, it was still possible, if you had a good-enough idea and were able to instill confidence in the investors.
Today, it’s very different, especially after 2008. Small business startups (particularly for women) are having difficulty in finding funding even for the best of idea. I find this odd, particularly since small businesses are the job engine for the U.S. economy. To make matters worse, commercial banks, for the most part, have decided they are not interested in small business at all.
In doing research for my radio program, I found an emerging environment that is helping thousands of people get the support they need that doesn’t require government subsidies or loans. Building upon the social networks and the Internet, people like you and I are making donations or loans and providing equity to help worthy business ideas get off the ground.
This new environment is called crowdfunding. I talked with experts on the evolution of this phenomena and entrepreneurs, who are providing funding portals and programs that help connect donors and investors with those who need funding. You can listen to these conversations by clicking on Business Matters Radio.
I also took a look at the potential impact of the Jobs Act of 2012, which was recently signed by the President. For the first time, it opens the potential funding to small business from people who are not “accredited investors”. We may be seeing the dawning of a new financial system that can truly democratize business financing.