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Assignment 2 (A. Bank Loan (Pros (While commercial lenders will review…

- - - - Most campaigns fail
        As I mentioned earlier, 60% don’t make it. $5,000 is the average successful raise. Of those that do raise, only half make more than 10% over their goal. John and I were fortunate to fit into that camp with a goal of $15,000 and a raise of over $17,000. Keep in mind, that puts us into the top 20% of all campaigns, and it wasn’t exactly a blowout. There are projects like Pebble and Ouya who blow it out, but they are very much the exception and not the rule.
      - You pay out 8-12% of your raise
        Each platform has a slightly different fee structure, but you’re going to shave nearly 10% right off the bat. That’s not to be taken lightly, you really have to budget for it.
      - It’s a LOT of work
        Seriously. To do it right, you’ll want to give yourself at least 3 months of prep. You’ll need some amount of initial investment in marketing assets. Also, xpect a 30-day frenzy during which you commit 15-20 hours per week for a team of 2-4 people.
    - - Market validation
        To me, market validation is one of the most compelling reasons to try crowdfunding over alternative methods of raising seed money. When John and I invented RingSafe, we got good feedback from family and friends on our idea and prototype.
      - Consumer feedback
        Not only do you get the very binary validation of whether your idea has legs or not, but you also get access to a pretty engaged community of future buyers who will ask questions, provide feedback, request modifications or customizations that will expose flaws or gaps in your offering.
      - Funds
        Let’s not forget the actual money. What’s good and bad about the funds is that they are typically exchanged for a reward, not equity. Good because you don’t give up any part of your long-term potential gains.