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By Debbie Gregory.

In this series of articles, we will examine the financial options and program available to business owners to fund their business.

In the two previous articles, we have looked at self-funding and venture capital. Now, we will look at a fun option… crowdfunding!

Crowdfunding is where you get a lot of people to invest in your idea, rather than finding one person, venture capital firm or bank to come up with the funds you need. People who are interested in your idea or product usually buy in at various stages. Usually, the “early birds” who get in on the campaign at the very beginning get the best deals, and the closer you get to your goal, the higher the buy-in. Once you have received the funds, you can get going.

Most business owners use a platform such as Kickstarter, Indiegogo or Patreon.

Your first step will be to set a goal for how much money you’d like to raise and over what period of time. Friends, family, and strangers then pledge money as short term supporters who will receive something in return, a gift if you will, which is usually your product.

Crowdfunding is very low risk for the business owner. For the fee you pay to the platform company, you get to retain full control of your company, and you’re typically under no obligation to repay your crowdfunders.

Some of the most successful crowdfunding campaigns have raised millions of dollars, and include products such as the Pebble Time smartwatch (78,471 backers pledged $20,338,986), the Coolest Cooler (62,642 backers pledged $13,285,226) and the game Kingdom Death: Monster 1.5 (19,264 backers pledged $12,393,139). Film and video projects included Bring Back Mystery Science Theater 3000 (48,270 backers pledged $5,764,229) and the Veronica Mars Movie project (91,585 backers pledged $5,702,153).

Because each crowdfunding platform is different, make sure you read the fine print and understand your full financial and legal obligations.

Veteran and Military Business Owners Association, VAMBOA,

 

Grants for Veterans in Technology: VAMBOA

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vamboa grant

By Debbie Gregory.

As military members complete their tours of duty, re-establishing their careers may be one of the most important tasks in returning to civilian life. Some may be returning to careers that were interrupted during the time they served, but many are starting from scratch. Though the job market is showing some signs of improvement, it’s a slow rise, and those returning veterans are only adding to the many already vying for available jobs. This is one reason many veterans are coming home with aspirations of starting their own businesses.

Entrepreneurial endeavors may be the desired direction, but a good number of veterans express the difficulty acquiring their startup funds to be their biggest challenge. While most industry sectors have veteran business-owners, be it manufacturing, consulting or service industries, technology-related businesses appear to be increasingly popular for veteran entrepreneurs.

Banks are not as willing to establish loans for startup businesses. This leaves potential business owners needing to resort to other means to get their enterprises underway, be it self-funding, crowd-funding, or acquiring funds from friends, relatives, angel investors and venture capitalists. When those resources do not prove to be sufficient, an alternative is exploring government grants specifically for veterans in technology.

There are some stipulations. For example, while the federal government cannot provide grants to a business in the startup phase, it can provide grants for veteran-owned technology firms once established. Two in particular, the Small Business Innovation Research (SBIR) program and the Small Business Technology Transfer (STTR) program, average $2 billion in grants awarded each year. Administered by the U.S. Small Business Administration, the businesses most likely to be awarded grants from these programs fall into the small high-tech category, related to healthcare, education, public safety and criminal justice.

With numerous opportunities for gaining financial stability, and informational resources, such as those available through organizations like VAMBOA (Veteran and Military Business Owners’ Association), startups for veteran entrepreneurs are, indeed, attainable. Of the 28 million businesses in the U.S., approximately 2.4 million are veteran-owned, and this number is growing.

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