Given the Securities and Exchange (SEC) Commission is in the throes of easing federal regulations on how small businesses are able to raise money for startup and growth, a number of crowdfunding websites are cropping up to make the most of this unprecedented business opportunity. More specifically, sites like BlackStartup.com and PlumAlley.co (yes, ‘co,’ not ‘com’), among others, are aimed at ensuring both blacks and women, respectively, have a targeted platform for raising critical entrepreneurial funds and finding much-needed support.

But before we get too far ahead of ourselves, and given that the whole crowdfunding concept remains such a mystery to so many, perhaps it’s worth a quick recap of what it entails…

In a nutshell, crowdfunding refers to the process of raising money by asking many individuals to contribute to a specific business venture or cause over the internet, even if it’s in very small amounts. It can also refer to a company securing necessary capital in return for small amounts of investor equity.

The latest estimates reveal that crowdfunding websites raised roughly $2.7 billion in 2012 (up from $1.5 billion in 2011), a number that is expected to grow exponentially over the next decade. In fact, globally, the tally is anticipated to climb well past $5 billion this year alone.*

Needless to say, this is a fundraising and investing platform that is very much in its infancy in terms of potential.

While it’s true that the overall concept of raising money from multiple sources for a specific purpose or cause has been around for a very long time, it’s only with the advent of the internet that crowdfunding as we now know it began to take shape and the term itself was coined. So perhaps it is not surprising that, in yet another example of how technology is outpacing our ability to keep up, the SEC has been trying to put boundaries around an as yet fairly underdeveloped industry ever since.

Well now it’s set to loosen the reins.

Where private companies and businesses are currently allowed only to solicit money from investors who are deemed “accredited” (which constitutes a whole laundry list of criteria we won’t get into here), a new government proposal required under the JOBS (Jumpstart Our Business Startups) Act of 2012 will ease federal regulations on small business crowdfunding immensely. In fact, entrepreneurs and startups that are looking for backing will now be able to solicit funding over the internet from the general public, even if it’s in relatively small increments…up to $1 million each per year.

This latest development undoubtedly will be the spark that fuels a firestorm when it comes to how many and what kind of entrepreneurial ventures in the U.S. get off the ground and are able to grow over time. In fact, the possibilities become practically endless.

It’s with just that sense of optimism and unlimited potential in mind that a number of crowdfunding websites have taken flight recently. Furthermore, a number of them are aimed at addressing the needs of those entrepreneurs who have historically struggled the most in obtaining the necessary capital and support to both launch and grow their businesses, blacks and women in particular.

BlackStartup.com

Started in 2012 by six Morehouse frat brothers who are determined to empower the African-American community by pooling its resources to launch and sustain black businesses, BlackStartup.com is different than more mainstream crowdfunding platforms like Kickstarter and Indiegogo. It’s a niche-driven platform, they explain, specifically designed to foster the entrepreneurial efforts and aspirations of a particular group of individuals, which in turn will empower the community as a whole. Additionally, the site offers a support function that other sites don’t, enabling its users to access mentors as well as e-learning materials and legal and financial documents, all in a concerted effort to fill the knowledge gap that they believe has long been a challenge to African-American entrepreneurship.

Summing it up nicely, Nathan Bennett Fleming, one of Black Startup’s founders had this to say in a recent interview: “Ultimately, we are using technology to address the black entrepreneurial gap. We want to create more black economic (opportunities) within our community that (promote) jobs, wealth and investment.”

To learn more about BlackStartup.com, or to start a crowdfunding or fundraising business website, click here for more information now!

Plum Alley

Just over a year ago, PlumAlley.co began as an e-commerce website spotlighting products created by women. Now the site is expanding its domain to cover crowdfunding, focusing its efforts in this regard entirely on the needs of female entrepreneurs and helping them to raise money and obtain valuable advice and counsel from others like them who have experience and know-how to share.

On crowdfunding specifically, here is an excerpt from the site that says it all: “Plum Alley provides women entrepreneurs and innovators a way to raise money from a broad base of people. Crowdfunding is an efficient and inexpensive way to fundraise and is a way to increase women’s access to capital. Products funded on Plum Alley crowdfunding can be subsequently sold using our commerce features.”

To learn more about PlumAlley.co, click here for more information about this creative new business idea for women now!

*Source: Massolution.com