The new generation of entrepreneurs has become very creative with how they spend funds, and they have learned that they don’t need massive amounts of financing to build innovative services and scale them.
Austin, TX (PRWEB) December 14, 2011
MicroVentures, an online crowdfunding investment service that allows accredited investors to invest in deals that they might not otherwise see, today announced that it has raised $150,000 while it continues to focus on helping entrepreneurs connect with individual investors. This latest round was raised by using the service itself - all contributions were from several of the investors currently in the network, with the average investment of just over $10,000 per participant.
As easy money for founders is coming to an end in the current economic climate and an increasing number of start-ups face significant struggles to secure money, crowdfunding has continued its rise. When VC money dries up, the opportunity to get in on deals does not - quite the contrary. Crowdfunding services like MicroVentures open doors for individuals to invest in carefully vetted high-growth companies early, and have a return on their investment should the company have a successful exit. Entrepreneurs, for their part, have realized that it pays to shake your bootstrap to build a nimble, successful start-up and are turning to services like MicroVentures to find their perfect match.
“We are excited about the level of participation from the individual and independent investors we’re talking to. They clearly value the due diligence process we use for each of the start-ups that apply to the network,” said Bill Clark, CEO and founder of MicroVentures. “The new generation of entrepreneurs has become very creative with how they spend funds, and they have learned that they don’t need massive amounts of financing to build innovative services and scale them.”
Crowdfunding not only puts individuals in touch with high-growth start-ups, it also has a larger positive side effect. It addresses the question of how to generate economic growth from a web-enabled, bottom-up approach: individuals coming together to support small businesses that are the engines of creation of the U.S. economy. By 2012, the peer-to-peer trend is forecast to reach $1 billion in transactions. The more participants on the MicroVentures platform, the more opportunities exist for start-ups to get off the ground and succeed. And the more participating investors can leverage the power of this new funding platform.
In late October, MicroVentures announced that it raised $300,000 for a fund created to buy private shares in Facebook on a secondary market. The latest round of funding will be used to grow the platform and investor base to offer more opportunities to entrepreneurs and expedite the funding process, with the goal of reducing the fundraising cycles down from an average six months to even as little as a month or less.
Based in Austin, TX, MicroVentures Inc.’s capital model allows investors to fund start-up opportunities not typically available outside a traditional venture capital structure. Using its online crowdfunding service, MicroVentures creates additional investment opportunities for investors looking to make smaller commitments by pooling and connecting them with entrepreneurs, start-ups and small businesses looking to raise money.