With the hype surrounding crowdfunding in the news, such as Kickstarter raising $10 million for a smart watch maker and the recently-signed JOBS Act allowing small companies to raise capital through crowdfunding, it’s no wonder entrepreneurs are asking: What is going on? Is crowdfunding good for them? Should they participate, and if so, how?
After all, what is crowdfunding exactly? Of the so-called crowdfunding platforms out there, such as Kickstarter, Indiegogo, Microventures, Crowdfunder, etc.. how do they differ? What does a company need to do to participate and what are the obligations, if any, that a company has after raising the funds? Through her blog post below, Julia Cheng of CyberlawStudio tries to answer each of these questions and provide some food for thought for entrepreneurs thinking about joining the crowdfunding fete.