Crowdfund Capital Advisors launch “Crowdfunding’s Potential for Minority and Women Owned Enterprises” –Authors identify higher funding potential, access to capital and underserved market as key opportunity.
Crowdfund Capital Advisors today launched a report to highlight crowdfund investing as a powerful new tool to fuel the underserved women and minority markets.
According to Sherwood Neiss (@woodien), Principal at Crowdfund Capital Advisors and cllaborator of the report, “Crowdfund investing is addressing funding voids in many markets. Since women and minorities have historically been shunned from the private capital markets and now we have tools to allow them to access capital from their peers, we will be seeing many more women and minority businesses receive funding. This report lays out the rationale.”
The report’s authors highlight 4 cases where crowdfunding has had a positive impact on women and minorites. Jason Best (@CrowdCapAdvisor), Principal at Crowdfund Capital Advisors and a collaborator on the report adds, “When you look at Majority Minority communities around the United States you can already see how donation/perks crowdfunding is having a tremendous impact. It brings in capital to these underserved communities and more importantly, well needed jobs. As we move to investment based crowdfunding, these underserved communites will leap frog other communities that have benefitted from access to capital for decades.”
Key highlights from the report include:
- Because of the stigma attached to the difficulty in gaining access to traditional funding sources, many women and minorities forgo the traditional capital markets further reducing access to capital within these groups
- Data shows that many women and minority-owned businesses tend to be strong market performers, survived the economic crisis better than their counterparts, and were more profitable afterwards
- Women owned businesses had sales of over $1.4 Trillion in 2014
- 41% of businesses are women owned, but only 8% of ventures that are backed by professional investors are founded by women
- Data indicates that the venture community and banks have not invested proportionally in women and minorities
- Crowdfunding can provide an alternative method of funding minorities and women, while providing investor protections and enabling risk sharing among a community.
- Of the fifty highest funded projects on Kickstarter, the premier crowdfunding site, 45 have turned into ongoing entrepreneurial firms . This proves that crowdfunding ideas can lead to promising enterprises.
- Crowdfunding is unique because it not only brings money, but also an engaged community of supporters that are both customers and investors
- Peer to peer lending data shows that women are receiving more funding then men
- Major underserved markets, many of which are turning majority minority, are where very successful crowdfunding campaigns have been based
- Promoting crowdfunding as an alternative funding source for women and minorities can create more new business starts, tax revenue, jobs, gender inclusivity and economic equality. All key parts to a healthy economy
Crowdfunding is attracting global interest as a simple but transformative concept. Someone proposes a business, charitable or creative project on a crowdfunding website. If convinced, tens, hundreds or even thousands of individuals commit relatively small amounts of capital to support the idea or business. Taken together, these contributions are significant enough to turn the idea into a commercial reality.
Crowdfund investing is the newest and potentially most powerful model for crowdfunding: instead of donating or lending money, investors receive an equity share in the business.