Raising startup capital is a perennial challenge for many entrepreneurs. Anything that can be done to help make this process easier is welcome news. It’s very likely that soon crowding funding platforms, which have become a popular way to raise small amounts of capital from friends and family, will be getting a boost from the government. Earlier this month, the U.S. House passed legislation that will allow startups the opportunity to raise $1 million in startup capital from any number of individuals, who can invest up to $10,000 (or 10% of his/her income). Read more specific info that was recently published in Venturebeat. As with anything, there are pros and cons. While nearly $1.6 billion has been raised on existing crowd funding platforms such as Profounder, IndieGoGo, and Kickstarter that number is expected to increase to over $6 billion by 2013.
So, if you’re looking to raise capital through crowd funding, start to get your “ducks in order”. Get your presentation, plan, pitch buttoned up and then sign up for one of the platforms now. Profounder, for example, is free to sign up for so there’s no cost in getting your ‘raise’ set up. (You will, however, pay about 4% of the raise in fees if or when you actually hit the ‘go’ button to raise capital). By gearing up ahead of time, you’ll have the first mover advantage when the President signs this bill into law which could be sometime in December. You’ll be ready to hit the road running before the rest of the country jumps on the bandwagon.