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Crowdfunding provide funding boost for new business

A group of Michigan entrepreneurs, capitalists and investment bankers have teamed up to launch Relayfund Inc., a new crowdfunding website aimed at revolutionizing the ways in which startup operators source funding for their business ventures. Adequate funding is always at the forefront of concerns among anyone trying to start a new business . Crowdfunding is simply the act of raising money online from a variety of investors. It involves bringing the talent of inventors and innovators together with the funding from small-scale investors.

The idea is similar to that of a good old-fashioned church fundraiser. It is nothing more than presenting an idea, such as a need within a community, to a group of potential investors or contributors. In much the same way that a church can raise money for a mission trip by approaching its members with the message of the mission and asking for donations, business startups can use Relayfund to reach private or small-scale investors to solicit funding for their project. It simply uses technology and the Internet to bring the two groups together.

The recently passed bipartisan JOBS Act has paved the way for businesses to seek and receive funding through private equity and venture capital, which was previously available only through Wall Street dealings. Relayfund, which is among the first crowdfunding ventures, will in essence open the playing field for business owners looking for funding. It will also provide a platform for individual investors who want the opportunity to get on board with a startup company before they make it big.

Relayfund was founded in Michigan in Dec. 2011 and is currently beta testing its website. The JOBS Act legislation will not be fully implemented until early in 2013. Until then, Relayfund is planning to hit the ground running as soon as the gates open for this innovative way of venture funding. For those who may be considering starting a new business venture, there is a new funding choice on the horizon that should be given consideration during the planning and research phase.

Source: M Live, " See how new Michigan 'crowdfunding' website RelayFund hopes to drive economic growth ," Shandra Martinez, July 9, 2012

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