Many new businesses are looking at crowdfunding as a new fundraising option. There have been some very successful offerings – for example, Exploding Kittens, a card game, raised over $8 million. That is obviously an exception, but it shows the power of Kickstarter and similar sites. However, for every Exploding Kittens, there are campaigns that fail in one of two ways: either the project fails to make its target amount in the time allotted, or it is funded and the campaign organizers never ship their product.
As this new funding medium grows, so do the issues for businesses taking advantage of it. Legal issues abound as state governments struggle to catch up with this new business model. It is important for attorneys to be aware of them in order to best advise clients.
There are two main sites for new businesses to crowdfund. Click here to learn more about these sites and to read the full article.