Last week, Launcht was featured in the New Jersey Tech Weekly article on alternative financing solutions for tech companies. The article covers the October 2012 panel discussion organized by the New Jersey Entrepreneurial Network. Launcht CEO Freeman White presented at the event on the current and future state of crowdfunding.
Freeman addressed the difference between presale and equity crowdfunding. Under current laws, investing in businesses themselves is illegal, unless you are an angel or accredited investor. When the rules and regulations of the JOBS Act are defined, the public will be able to invest upwards of 5-10 percent of their income in startups and small businesses.
While companies wait for equity crowdfunding, they can use the presale space to develop and test their product. In many ways, presale crowdfunding is a form of market research –companies learn early on if they are able to engage an audience and sell their product. At the nonprofit and university level, crowdfunding portals are supporting research projects, philanthropic causes, and student entrepreneurs. The delay of equity crowdfunding should not discourage organizations from using current models to raise needed funds to support their projects.