Summary List Placement
In a time of heightened uncertainty, skyrocketing unemployment, and plummeting revenues, many startups are wondering if it’s the right time to raise capital.
According to Kevin O’Leary, great companies that are growing always need money. In a webinar with StartEngine CEO, Howard Marks, the “Shark Tank” judge said equity crowdfunding will have to pick up the baton from venture capital firms.
“You can’t even get a meeting with those guys right now,” O’Leary said. “This is no different from what happened in 2007 and 2008 when Kickstarter and Indiegogo were born out of necessity.”
Marks said there’s been an increase in investors on StartEngine since March 1, 2020. “It’s completely the opposite with VCs,” he said, comparing it to the rates of VC investments between 2001 and 2010, which took a hit during the dotcom bubble and Great Recession. “We’re much more resilient as a funding mechanism than the VCs were.”
A University of Alberta study found that past successes and failures can shape future crowdfunding campaigns. An over-funded or under-funded campaign can encourage individuals to invest in similar entrepreneurial endeavours, according to the study.
O’Leary gave three reasons now is the best time for startups to turn to equity crowdfunding.
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Source:: Businessinsider – Strategy