As aspiring entrepreneurs take advantage of the giving spirit at family gatherings asking for funds to launch their new businesses, someone will surely ask if they’ve considered crowdfunding, the latest entrepreneurial rage. Crowdfunding — or asking for funding online, via one of the new vehicles like Kickstarter — has been touted as a spectacular way to democratize entrepreneurs’ funding. But its reach could be much wider.
You probably know how crowdfunding works by now. Consider the story of Dave and Dave, a pair of 25-year-olds who had a great idea for a new coffee bean that keeps your coffee at the perfect drinking temperature — Coffee Joulies — but who didn’t know any wealthy investors who could help them get going. Thirty days after they posted their idea on Kickstarter, they had raised more than half a million dollars, enough to launch.