Guide to Starting and Operating a Small Business | 2018 Guide to Starting and Operating a Small Business - Page 13

SBA LINC (Leveraging Information and Networks to access Capital) An SBA program to connect borrowers with SBA approved lenders. www.sba.gov/tools/linc Crowd Funding Crowd funding is a relatively new form of raising funds to support ideas or projects by contributions or loans from individuals or interested parties through a networked and publicly observable platform. It is being used in support of a wide variety of activities from artists and journalists, political campaigns, charitable purposes, invention development, entrepreneurship, to scientific research and more. Various platforms offering this type of funding can be searched on the internet. Because it is relatively new, the state and federal rules governing these kinds of solicitations and securities are still evolving, so it is strongly recommended to seek professional advice before engaging in crowd funding. Equity crowd funding (ownership based), is still a complex work-in-progress with SEC (Securities and Exchange Commission). To facilitate Michigan equity crowd funding, the state legislature passed the “Michigan Invests Locally Exemption” (MILE), which allows small businesses to raise capital by reaching out to Michigan residents to invest in their companies. There are many regulations governing this type of funding and serious consequences for violations of either the Federal or State regulations. For more information on MILE go to: www.michigan.gov/lara/0,4601,7-154-61343_32915-332094--,00.html For more information on crowd funding, refer to the section “Financing a Business” beginning on page 40. More thorough and detailed information is available online in pdf format: “The Crowd Funding Bible” by Scott Steinberg at: www.crowdfundingguides.com/The%20Crowdfunding%20Bible.pdf Anyone considering crowd funding should thoroughly research the advantages and disadvantages, and consult an attorney and/or accounting/finance professional who is knowledgeable and experienced in crowd funding. It is extremely important to consult with a securities attorney for guidance before deciding on or entering into equity crowd funding. Decision Point. Is It Feasible? Once you’ve gathered and reviewed your market research and financial information, you can make knowledge- based decisions: To go forward as you intended or to modify your plan. • • • • Weigh the facts and make decisions based on what you KNOW, not “think” or “feel”. Is there a need in the marketplace for your product or service? Can you generate enough sales to achieve your personal and business goals? Can you justify the investment and risk? What is your value proposition? (Why a customer would want to buy from you instead of a competitor.) After research and informed consideration, most entrepreneurs adjust their original concept in some way, and quite often a smaller scale startup is the option chosen. Always be prepared for the possibility that expenses will be more than you projected, or that sales will develop more slowly than you expected. NOTE: Once you have made the decision to proceed, Steps 4, and 5 will happen somewhat simultaneously, though they are numbered according to a recommended sequence. 11