5 Things to Consider When You Kickstart Your New Business

Kickstarter and other online fundraising websites are a great way for a new business idea to become a reality. However, it is not a cure-all for new or established business financial woes. If you are thinking of raising funds for your new business or even an existing business, you want to make sure you don’t fall into one of the many pitfalls associated with these crowdfunding sites.

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Don’t Just Rely on Kickstarter

Kickstarter has been around since 2009 and while it is great for raising funds, it is not a guarantee. If you only rely on Kickstarter and ignore other financing options, you are essentially pigeonholing your new business. For example, if you are a veteran, you can qualify for a loan via the U.S. Small Business Administration.

Know the Rights of the Investor

Like all crowdfunding, a legal gray area is hard to identify with these online services. While you may have little in promises from Kickstarter, realize that any promises you give to investors for investing you must keep. Unlike real investing, Kickstarter users that are not given what they are promised can get a refund from Kickstart – and leave you without the money.

Kickstarter is Not There to Bail You Out

If the people that have invested in your company decide to sue you later because you cannot deliver on your promises, Kickstarter will not represent you. Also, by using Kickstarter, you agree to release them from all liability – so they will not be there with you in court if you are sued.

Kickstarter is Only a Jumping Block

If you have a successful Kickstarter campaign, do not stop. You need to move on to other financial options to help establish equity in your business – such as a crowdfunding for equity venture. You want to eventually attract accredited, real investors into your company so that you can continue to grow.

It’s Usually Not a One-Shot Thing

If you try Kickstarter, realize that it may not be successful the first time around. You are competing against other businesses and causes. If your marketing plan on the Kickstarter campaign isn’t adequate enough, then it may not attract an audience to your business. If your first attempt fails, do not be afraid to try it again.

Speak to an Attorney before You Use Crowdfunding

While you may think crowdfunding is the best option for your business, you may want to speak to a Miami business attorney. With the legal gray area, Campbell Law Group can help you decide which funding method is best for your business. Call us at 305-328-9506 today to get started.

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Written by The Campbell Law Group

The Campbell Law Group

Regina Campbell, Esq. is the Managing Partner of The Campbell Law Group based in Coral Gables, Florida. Her prior entrepreneurial experience in building businesses has not only given her the opportunity to develop and hone her business acumen, but has also shaped her background and knowledge to better position the firm to serve and understand all of its client’s needs in an ever-changing global economy.