My parents taught taught me two very important lessons: 1) to work hard for what I earn and 2) to share. I have passed on these values to my daughter, Katelyn. But today’s new generation of young people are taking an interesting twist on these values and collaborative thinking, with the use of crowdfunding. As a bookkeeper and certified public accountant, a lot of my clients asking me what I think about this concept.
What exactly is crowdfunding? Crowdfunding is basically raising money from a large number of people, to fund a project; it’s typically done through the worldwide web. Crowdfunding or crowd sharing has been around for years, but it’s gaining popularity as a way for startup companies or current businesses to raise money online. What’s amazing is that anyone can raise up to $1 million dollars online. The only restrictions are that the investors must be non-accredited and the online site has to be an approved crowdfunding platform.
Back in 2013, Forbes magazine said that the crowdfunding industry grew to over $5.1 billion worldwide. In 2017, the industry in the U.S. alone generated roughly $2.1 billion. The majority of money raised has been on successful sites, like Kickstarter, Indiegogo, GoFundMe and Crowdfunder.
If you plan to crowdfund, make sure to do your homework because you could be taking a risk. Know the campaign’s goals and decide whether it will generate enough public support to deliver.
Finally, talk to your bookkeeper or accountant about the tax implications to your company. I would be happy to talk to you or email me and we can discuss this further.
I will always be grateful to my parents for instilling me the values of hard work and sharing. Sharing is a great thing, but is crowdsharing for you? It may be the wave of the future, but make sure it’s ultimately right for you and your business.