Crowdfunding American Veterans – A Brilliant Idea

July 16, 2012
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So, I was chatting with David Marlett, JD, CPA, Founder and Executive Director of the National CrowdFunding Association and he told me about CAV – Crowdfunding American Veterans, an initiative of the Association.  The idea is to bring crowdfunding to veterans to help them start new businesses or expand their current businesses – a simply brilliant idea.

 

 

So, I was chatting with David Marlett, JD, CPA, Founder and Executive Director of the National CrowdFunding Association and he told me about CAV – Crowdfunding American Veterans, an initiative of the Association.  The idea is to bring crowdfunding to veterans to help them start new businesses or expand their current businesses – a simply brilliant idea.

For those who don’t yet know what crowdfunding is here is a brief explanation. Crowdfunding is a way of encouraging lots of people to fund projects, businesses, or ideas that they like.  There are four types of crowdfunding:

  • Reward-based
  • Donation-based
  • Loan-based
  • Equity-based

In reward-based crowdfunding, small rewards are offered in return for pledging a certain amount of money.  For example, you will get a signed CD from the musician if you give him $25 to help cover the costs of making it.  Kickstarter and IndieGoGo are examples of reward-based crowdfunding sites.  Donation-based crowdfunding usually involves non-profits who appeal to donors interested in supporting their cause.  In loan-based crowdfunding you loan the money to the entrepreneur with the expectation of being paid back – with or without interest.  Kiva is an example of a loan-based crowdfunding organizatio.  They raise money for microloans to entrepreneurs primarily in the developing world.  Equity-based crowdfunding means you can receive a bit of equity in exchange for your contribution.  Seedr in the UK is an example of this type of crowdfunding.  In the US currently it is only possible to crowdfund for equity with accredited investors.  The JOBS Act expands crowdfunding to non-accredited investors, but it will only be possible to offer this type of crowdfunding after the SEC publishes regulations to govern the activity.

 

Going back to CAV, the initiative was born from the NLCFA’s involvement in the Clinton Global Initiative – America.  It is still in development, but I think it promises to be a terrific resource for veterans returning from service and looking to start or grow a business.  Below is a quick video introducing the idea:

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