Start-Up Capital: Seed Funding

As an entrepreneur, do you know how most businesses get funded (we’re talking >90% here!)? It is NOT the SBA (small business association) that only guarantees loans for small businesses if you have significant collateral; It is NOT VC (venture capital); It is individuals. Now, you may ask, “Are these Accredited Investors.”
According to Wikipedia an Accredited Investor is defined by various securities laws that delineates investors permitted to invest in certain types of higher risk investments including seed money [that’s start-ups!], limited partnerships, hedge funds, and angel investor networks. The term generally includes wealthy individuals and organizations such as a corporation, endowment, or retirement plans.
In the United States, for an individual to be considered an accredited investor, they must have a net worth of at least one million US dollars not including the value of one’s residence or have made at least $200,000 each year for the last two years ($300,000 with his or her spouse if married) and have the expectation to make the same amount this year.”[1] This rule came into effect in 1933 by way of the Securities Act of 1933.
Realistically, having a million dollars in assets isn’t terribly challenging in many states, including California (of course, tied up in real estate). Many become Qualified Investors, but aren’t really in a position to invest. The AC (Angel Capital) market is made up in part by these ‘marginal’ qualifiers and the remainder are truly (HNWI) high net worth individuals.
But let’s look at scale. To get to the point where HNWI or AC will invest in your company, you will need some cash flow to get there! Check out these sites to raise seed money from those slightly less affluent (not ‘qualified’), but more likely to get you what you need – cashflow!
Go Directly to Seed Funding Sites (many more examples can be found online):
http://www.startupaddict.com/

or build a FUNdraising campaign;
1. Create a fundraising page…
Fundable (http://www.fundable.org/) provides a simple way to create a fundraising page in support of your project. In 15 minutes or less, you can customize a page with an appeal letter, your fundraising goal, and a supporting image.
2. Use pledges to build support…
PledgeBank (http://www.pledgebank.com/) is a tool for building support around certain actions through individual pledges. As part of your effort to solicit donations, you can post pledges on PledgeBank and encourage others to follow your lead.
3. Build your campaign around a fundraising widget…
Like Fundable, ChipIn (http://www.chipin.com/) can be used to receive donations toward a specific fundraising goal. Instead of providing a single fundraising page, ChipIn offers a fundraising “widget” that can be used to display a “donate now” button on several webpages at the same time, as well as the latest statistics on the success of your fundraising campaign.
4. Raise money for your project on Facebook…
Change.org (http://www.change.org/) is a social networking site that offers a fundraising application that integrates with Facebook. As a member of Change.org’s fundraising application, you can post a “change” that corresponds with your project. Use the space that Change.org provides to describe your project and upload related links, images, and videos.
5. Launch an online store in support of your project…
CafePress (http://www.cafepress.com/) offers a simple tool for raising money by selling merchandise that relates to your project. Without much work, you can start selling T-shirts, coffee mugs, tote bags, and other items that bear the message or logo of your project.

All of the items on CafePress are assigned a base price. To earn money, you determine a markup price. Once an order is processed, the base price goes to CafePress and you receive the markup. CafePress will send you a check by mail within 45 days of any merchandise purchase.

The CafePress solution is an ideal way to reach people who won’t donate unless they receive something in return.

Happy Funding!