CARTOONS BY CHRIS BRITT

DISADVANTAGES
Resource intensive. As with any form of crowdfunding, there’s a lot of groundwork to do
before you start raising funds. This includes getting the word out through every channel
you can think of and tirelessly promoting your business or project.
Exposure. It’s a dog-eat-dog world out there. In addition to investors, competitors can see
what you’re up to as well and beat you to market. Make sure your intellectual property is
properly protected before going public.
Can be expensive. Some states are making new rules about equity crowdfunding, in
addition to the ones legislated at the federal level. Federal law may require entrepreneurs
to pay a fee to a registered broker or portal and that can be very expensive. If you’re
raising $1 million, for instance, you’ll have to pay a third party broker as much as
$150,000 to conduct the offering.
Regulations. All the new rules and regulations added by states can mire you in red tape.
Know all the rules before you proceed as they vary by state.
EQUITY CROWDFUNDING EXAMPLE
Camperoo is a subscription-based business that picks up where schools leave off,
providing 6-12 grade students with skills in technology, creativity, engineering, teamwork
and STEAM in a fun, casual real-life environment. To fund their venture, Camperoo
raised $838,000 from 35 equity investors on Wefunder. To date, Wefunder has assisted 114
startups raise over $17 million from 58,830 investors.
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