Although the economy continues to slowly recover, many small businesses are still struggling to survive. Startups are facing the same challenge of staying afloat long enough to begin to turn a profit and without access to accredited investors, which represents roughly 1 percent of the U.S. population, loans from banks may be the only option. In 2009, U.S. banks posted the sharpest decline in private lending since 1942. Unfortunately in this scenario, entrepreneurs are often limited to accredited investors and venture capitalist money, which reject 95 percent of new business plans. Due to this lack of capital and access to accredited investors, building a company from scratch in the U.S. at this time is challenging. These starving companies directly impact the unemployment rate, as small businesses generated 65 percent of new jobs over the past 17 years.
The crowdfunding industry may be the best new tool for helping to save the U.S. economy. Crowdfunding gives new power to the people by enabling anyone to make a difference by contributing money to the newest innovations, businesses, and causes. It enables the community to support the new businesses responsible for creating jobs by giving them access to funding that wasn’t available before.
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Via Jonha Richman