Can crowdfunding help you raise outside capital from conventional sources? There are certainly examples. After being turned down by venture capitalists, the inventors of the Pebble Watch went on to smash records on Kickstarter, raising $10 million in a 2013 campaign. Then the VCs came calling, investing $15 million in the smart watch venture. And Oculus Rift, the virtual reality headgear maker (shown above), was acquired by Facebook for $2 billion after its successful Kickstarter campaign.
But aside from those famous outliers, does crowdfunding increase an entrepreneur’s chance of snagging venture capital or angel investments? According to a new study, the answer is yes—by as much as 70 percent.
A successful crowdfunding campaign also generates an increased probability of business partnerships, greater publicity, a stronger customer base and an easier time attracting employees, the research found.
Entitled Research on the Current State of Crowdfunding: The Effect of Crowdfunding Performance and Outside Capital and published recently by the Small Business Administration’s Office of Advocacy, the study suggests that successful crowdfunding campaigns of all kinds can act a “proof of concept” for early stage investors. […]
The full and original article can be viewed on Locavesting.com
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