Raising Money by Crowdfunding - The Advantages
In this presentation the speaker explains the advantages of equity crowdfunding for startups. He notes that companies can issue common shares to crowd investors, granting them proxy voting rights that can turn shareholders into brand ambassadors who are motivated to promote the business. He highlights StartEngine’s Scout program, where small investors (contributing $1k‑$5k) refer friends and help spread awareness. The speaker argues that crowdfunding simultaneously raises capital and serves as a marketing channel, increasing brand visibility and driving revenue growth. Importantly, the cost of raising money is recorded as a balance‑sheet item (cost of capital) rather than an expense on the profit‑and‑loss statement, meaning there is no direct hit to earnings. Finally, he suggests that these investors can become free customers who spend on the company’s products or services.
