Connected: Alternative financing exists for startups
If you’re an entrepreneur, running your business effectively requires access to capital — whether you run a tech company or have hung out your shingle on Main Street. But sometimes finding cash for operations is difficult.
The Indus Entrepreneur (TiE) and Enterprise Forum recently conducted a joint meeting to expose members of both groups to alternative types of financing. Moderated by the head of a local venture capital fund — Ned Renzi of Birchmere Ventures — the panel featured a serial entrepreneur from Pittsburgh (Jake Witherell of Schell Games), the founder of a health care industry company in New Jersey (Paulo Machado of Health Innovation Partners) and a New York inventor/former investment banker (Larry Baker of bolstr.com).
Mr. Witherell started by talking about the campaign that his company did with Kickstarter, an online resource that helps fund new projects. With Kickstarter, you’re not really selling stock; instead you’re often selling a future delivery of the product that you plan to create.
In his case, Schell Games was attempting to raise $10,000 for a new game called “Puzzle Clubhouse.” The company offered backers — those who pledge and provide dollars through Kickstarter — a special game profile status and limited edition desktop backgrounds so they could revel in the fact that they helped bring this game to market. More than 200 backers took them up on the offer, pledging $11,403. The company reached its funding goal on Jan. 8.