The Hill News

Imagine you have a great idea for a small business. You’ve identified an untapped market, drawn up a detailed business plan and saved about 50 percent of the capital to get the idea off the ground. But your bank isn’t lending to start ups right now- you’re too much of a risk. And there is no rich aunt to leave you an inheritance.

Where can you get the money to make your dreams come true? The answer is crowdfunding. The idea behind crowdfunding is simple: an entrepreneur obtains money through the Internet from many micro level investors, instead of using traditional banks for a line of credit and beyond what the entrepreneur could have obtained from “friends and family” investors. Until now, crowdfunding has been popular with non-profit projects but illegal for capital investors looking for a financial return on their investment.

And with so much turmoil in the nation's banking institutions, the entrepreneurial spirit in this country is at r! isk of being choked to death. Banks have become more and more afraid of taking risks - even small ones. Capital for start-up ventures has become harder and harder to come by. By opening up the Internet to investors looking for new businesses to invest in, we can stoke the creativity that is waiting to be unleashed in this country, especially for entrepreneurs who have given up on employment in the formal sector of the economy.

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