Many of today’s largest and most successful companies — both in Arizona and nationally — started out as tiny and struggling business entities that desperately needed material infusions of cash to grow.
And that is true of players across a wide world of industries, ranging from retail and hospitality companies to real estate concerns, service-offering businesses and myriad other enterprises.
Obtaining financing has historically been kind of a slippery slope for fledgling businesses and ambitious entrepreneurs. In many instances, individuals with strong ideas have been confined by limited options for raising money. For some, it’s been a walk through the door of a bank and an obligatory spiel about prospects that will hopefully induce a banker to offer a traditional loan. For others, it has essentially meant living in a car and working out of a garage until business matters really click.
The new world of so-called “crowdfunding” might now change that. Federal securities regulators have given approval for a novel fundraising approach that seeks to make it easier for small investors to hear business pitches and, when so inclined, write checks in exchange for an equity piece of a business startup that is seeking money to grow.
Crowdfunding was given the official go-ahead on Monday of this week, with an NPR article noting that “ordinary investors” will now be able to access new business ideas through Internet portal sites and, when sufficiently impressed by a new idea, fund a business with as much as $1 million in capital.
Could this new financing vehicle revolutionize American business?
At this early juncture, it’s obviously hard to say. Equity crowdfunding certainly does expand financing options available for new companies, though, and enable would-be investors to more easily participate in business transactions.
Undoubtedly, many Arizonans with impressive new business ideas and state residents looking for viable new businesses to invest in will take a close look at crowdfunding.
Call Cook & Price, PLC today at 480-407-4440 or email us through this website.