10 Things Black People Need To Know About Crowdfunding

10 Things Black People Need To Know About Crowdfunding

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2. Right now, crowdfunding is an unregulated market. According to ex-loan officers, major commercial banks targeted the black communities for unfair, high interest loans. The same thing could very well happen in crowdfunding (in about five years).

3. For African Americans, crowdfunding has the potential to even out the black and white wealth gap (estimated at $236,500 in 2009). How? By allowing black businesses to launch projects, products and services that have every chance of becoming more valuable over time. According to the Urban Institute, whites have about three and a half times more wealth than blacks in their 30s, but seven times more wealth in their 60s. One reason this gap exists is the increase in the value of businesses started by younger persons in their 30¹s.

4. If money circulates five times in its place of origin, it generates a small economic boom. Money does not circulate in the Black community. Black businesses receive less than 2% of the $1 Trillion dollars that African Americans spend every year in the US. Crowdfunding has the ability to change that and tap into that black buying power.

5. Crowdfunding has the potential to even out the black and white unemployment gap (6.7% vs. 13.4% in 2013). It will do this by creating employment opportunities generated by black businesses that are able to get their products and projects crowdfunded.

6. Crowdfunding is not easy. The average crowdfunding campaign raises $1,126. The average campaigner has 426 Facebook friends. Many never reach their target goal.

7. There are two types of rewards-based crowdfunding campaigns: All or None (you get no money if you do not reach your goal) and Take What you Can Get (keep all money raised).

8.The key to asking for money from the masses is to tell a really good, compelling story. There are success stories of entrepreneurs raising thousands, even millions of dollars using Crowdfunding.

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