contractor success Small Businesses Changing legislation could create new sources of capital for startup operations. By: Elizabeth Kulik And Crowdfunding S Sustainability is all about social, economic and eco-innovation, but where will the capital for future enterprise innovation come from? Whether it is a high-growth or main-street enterprise, crowdfunding is a powerful new source of alternative capital that intrinsically aligns with sustainability. It is about people helping each other to get things done. Very simply, crowdfunding is all about people funding other people with small amounts of capital. Do you have a great idea, product, service or mission that is innovative and solves a big social, financial or environmental problem? Take it to the crowd for funding. For any project to successfully attract capital of any sort, it must be investment-worthy from the start. Banks want to see credit, equity wants revenue, but people who participate in crowdfunding have their own individual rea-sons to invest or contribute, and much like sustainability, crowdfunding gives entrepre-neurs the ability to appeal to multiple public and private stakeholders with different so-cial, economic and eco bottomlines. Some will invest for the financial returns, some the social or eco impact, while others will contribute or invest to be part of some-thing special and new; and it’s personal. Crowdfunding is institutionalizing private funding for high-growth and main-street small and medium enterprises (SMEs) by digitizing and simplifying the complex pro-cesses of sourcing investment capital. According to the Small Business Admin-istration (SBA), 55 percent of all new and in-novative products and services come from entrepreneurs and small businesses. Paying 44 percent of the country’s private payroll, these enterprises generate 30 per-cent of the value of goods and services ex-ported by the United States. Yet it is these smaller enterprises most seriously underserved by any structured fi-nancial market. More often than not, they are either too early stage or do not generate sufficient rev-enue or scale to provide double digit ROIs and exit opportunities that meet the require-ments of traditional sources of lending, VC and PE. A Practical And Versatile Financing Solution So how does it work? Start with fundamentals to make a direct connection with the public. Image courtesy of Stephan John/iStockphoto/Thinkstock Crowdfunding is a pow-erful new source of alternative capital that is based on the concept of people helping each other get things done. 46 CM/Cleaning & Maintenance Management ® • November 2013
CMM – Archives November 2013: 46
