Diverse founders and social entrepreneurs benefit from raising capital via investment crowdfunding in ways that they don’t via other capital sources.
Entrepreneurs and small business owners quickly learn to take money when it’s on offer. If a venture capitalist offers you money, you’d generally be wise to take it. If a bank is willing to give you a small business loan, take the cash!
As companies mature, they develop a reasonably complete “capital stack,” comprising a variety of equity and debt sources that optimize the cost of capital. It is an increasingly common view today—though not yet conventional wisdom—that having a layer of crowdfunding capital or two makes sense.
There are some clear and specific reasons I’m a big fan of using crowdfunding from the standpoint of a founder or entrepreneur. Here they are:
Investors Bring Value: Every private investor I’ve encountered over a decades-long career spent in finance brags about the value they bring in addition to the money, suggesting—o…