How Self-Funding Your Business Differs from Crowdfund Investing - dummies

How Self-Funding Your Business Differs from Crowdfund Investing

By Sherwood Neiss, Jason W. Best, Zak Cassady-Dorion

Self-funding your business differs from getting crowdfund investing support in a major way — one involves your own wallet, and the other involves a whole bunch of other wallets.

[Credit: ©]
Credit: ©

With that technical explanation out of the way, here’s how crowdfund investing changes your need to self-fund your business: It doesn’t. The first dollars invested in your business should be your own money, and crowdfund investing doesn’t alter that fact. If you’re going to launch a business, you need to believe in its success all the way down to your core.

To show this belief, you need to invest in your own company. If a potential crowdfund investor were to look at your campaign and see that you’re starting off with $0, this fact would be a big red flag. By investing your own money, you demonstrate that you believe in yourself and your business model.

How much of your own money should you risk? It’s important to understand how you work under stress with your money on the line. Aim to invest an amount that will give you just enough stress to drive you to work hard, but not so much stress that you’ll be a worried mess and distracted from productivity.