With new analysis coming out about the new JOBS act, it is interesting to witness public reaction to something that we researched vigorously about a year ago. In fact, we even set up a profile on the now defunct Profounder’s website as a step towards seeking crowdfunding. But after weighing the benefits and the drawbacks, we concluded that it wasn’t a route we wanted to take. It is not the magic pill that will launch a struggling, bootstrapped startup into the next big phenomenon, and it isn’t without serious ramifications not only for the brave souls who plunk down their money but also for the brave souls who decide to take it.
A year later, I am not sorry at all that we chose to eschew the crowdfunding route. It’s made the path to viability a bit longer and more arduous, but it’s also meant a lot less “cooks in the kitchen” when deciding what the best path forward has been for APPCityLife.
A recent analysis posted on CNET summed up one concern we had ourselves:
Startup CEOs could lose everything. Speaking of lawyers, companies that take crowdfunding expose their officers to personal liabilty; they can be sued for their personal assets. For this reason, many businesses won’t open up crowdfunding rounds unless they absolutely have to. The overall quality of crowdfunding investments will be lower than it would have been otherwise.