Which Type of Crowdfunding to Use to Fund Your Business

What Type of Crowdfunding Fund Your Business to Use to AMOUNT EQUITY >$50,000 DEBT (P2B) %24 $50,000-$500,000 or EQUITY <$50,000 REWARDS OR DEBT (P2P, P2B) TIME equity rewards debt 4| 6| 8| 9| 10 11| 12 Month: 3 <1 month 3-5 months 5-10 months STAGE Startup Growth debt (P2B) rewards debt equity (P2P) equity (?) rewards Yes No Current Positive Cash Flow: debt (P2B) or equity debt (P2P) or rewards or equity Quick Pros & Cons: access to cash Monthly cash outflow Must have a good credit score (P2P) or positive cash flow (P2B) Lending: You keep your company's ownership Costs: O (Kiva Zip) up to 15% for P2B and 7% to 35% for P2P You can raise significantly Significant upfront costs and more funds annual SEC EQUITY filing expenses You will give up a small % of shares, so The most time You will not have monthly cash outflow will keep the control over the company's operations and planning consuming out of three types of crowdfunding (as in debt model) Costs - depend on the amount to be raised. Portal fees - 7.5%-10% plus legal and accounting expenses, annual filing costs. Very time consuming and it takes months to You can raise significantly more than your initial goal get the funds You keep your company's ownership You can use the In the case of fixed campaign for customer engagement, marketing and PR, pre-sales, beta-testing, crowdsourcing, finding potential partners, distributors and investors Huge competition for backers' funding there is a possibility that you will not get any REWARDS attention on popular crowdfunding portals money Not all types of businesses/products are a good match for the rewards type You don't need to file extensive documentation Costs – 7%-14% plus perk fulfillment and marketing expenses (as in equity crowdfunding) or to have high credit score (as in P2P lending) or a profitable business (as in P2B lending) 24 YOUR BEST OPTION P2P Lending – for startups in need for immediate cash and means to meet payment obligations P2B Lending - for established businesses with positive cash flow to finance their expansion REWARDS – for businesses operating in B2C market with reasonably inexpensive and innovative but not too complicated products. Must have social appeal; be able to produce the product within several months after the end of a campaign EQUITY - for businesses that can't (don't want to) borrow money through P2B marketplace, companies in need to raise higher amounts of money. Must have cash upfront to fund the legal and accounting expenses and can wait for 5 to 10 month to receive the funds, CrowdFund Productions www.CrowdfundProductions.com %24