May 31, 2012

Customers as the New Investor Class

By signing the JOBS Act this past April, the door to crowdfunding swung open globally to entrepreneurs and startups. Funding sites such as Kickstarter, Fundable and Quirky have rocket-launched new ideas for innovation, and the funding success stories only grow larger with time. Most recent is Kickstarter's Pebble Watch project that was seeking only $100K and instead received $10.2M in funding support.

Rather than rely on VC capital to fund your business, this crowdfunding model uses customer support for capital. The best part: you get a first-look at real, customer market demand for your product before wasting time and money to develop something you later find they actually don't want. While it's nothing new to use a customer pre-order for your product, the growth of crowdfunding platforms is making it easier to access capital, and on a much grander scale. For a list of the top 10 crowdfunding websites for entrepreneurs, check out Plan to Start

Read this article from Gigaom on crowdfunding via customers as the new startup capital to learn more.