Expenses of starting a crowdfunding campaign

zaysev36

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Seeing how we hear more and more about equity crowdfunding got me thinking about a specific question - how much money does it cost to raise money? Despite the whole point of crowdfunding being, well, funding your project, you will definitely need some initial capital.

To be clear, I’m not talking about project development expenses, but rather expenses regarding fund raising specifically. Education, building a social network for your offering, creating and keeping the documents, performing required audit and checks, crowdfunding platforms fees, marketing the offering, providing your investors with reports, insurance... All these bring either single or monthly payments cumulatively anywhere from couple thousands bucks up to $30,000. Seeing how some people consider equity crowdfunding a first step to get your project ready and attractive for classic “serious” investors like VCs or angel investors, that’s some large amount of money.

Which in turn raises another question - to which stage of project fundraising does equity crowdfunding really belong? The way I see it now I can’t really answer this question myself. It’s an inconvenient tool to conduct a whole fundraising campaign with (due to numerous requirements and limitations both for investors and entrepreneurs), AND it’s quite exacting regarding the initial expenses to even start raising money. What do you guys think, will equity crowdfunding be able to find its place on the market and become a viable tool?
 
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