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New local-centric crowdfunding portal helps new business ventures

One of the most important elements needed in starting a new business is funding to lay the groundwork for a successful company.

Procuring startup funding can be challenging for a new business, which is why startup companies should look toward every available avenue to obtain funding. One new method of obtaining venture capital is through crowdfunding. Recently, a businessman in Michigan created a new crowdfunding portal to help new companies get off the ground.

A change in state law has made it optimal for the man to create a new crowdfunding portal that is specific to a certain area in Michigan. The portal aims to bring together companies and non-profit organizations with potential venture capital investors as well as donors. The entrepreneur is the head of Crowdfunding Services LLC, which is planning to open a total of eight or nine such portals in various other markets throughout the state.

The businessman says that he wants his crowdfunding portals to be different than other ones already available to the public by making them centered around the local communities. He says that he was prompted to take action after seeing a need for this type of crowdfunding portal. The man formed his new company in May 2012, but did not launch his first portal right away because he believed the current state laws at the time were too restrictive.

Now that Michigan law has been altered to allow investors to contribute more freely in exchange for equity in a new company, businesses can now begin looking to use the new community-centric portal to obtain investment funding. However, in order to convince potential investors to contribute via the portal, a new business will need to have a good plan to show that the company will be able to succeed and eventually bring a return on investment to investors. Also, it is necessary to make sure that the business plan conforms with applicable rules and regulations.

Source: mibiz.com, Kzoo portal aims to facilitate local crowdfunding, Mark Sanchez, Jan. 19, 2014

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