For centuries, the wealth gap has remained steady between entrepreneurs of color and white investors. Thankfully, equity crowdfunding platforms have found a way to disrupt this cycle. The disruption highlights important and progressive changes.
With the help of equity crowdfunding platforms, minority founders and investors can see the potential to build wealth together.
Here are three ways that minority founders are winning with crowdfunding.
1. Better Community Building
Crowdfunding is a way to build communities. When crowdfunding projects offer equity to investors, they can nurture small business owners. They also empower investors.
For years, the world of investment has been an exclusive world only for a select group of entrepreneurs. Community-based funding brings a welcome change.
On crowdfunding sites, popularity is much more merit-based than other forms of funding. Investors get to see the idea, how many people have signed on, and how much money it's raised before they meet the investor. The internet encourages community building which is a great way to level the playing field.
Investors will see how much equity they can get long before they know the identity of the founder.
2. Access Builds Confidence
When someone wants to create a project that is vital to their community, they need capital to get things started. Minority-owned businesses struggle in ways that more niche businesses don't. Even today, white men dominate the ranks of corporate leadership.
Raising capital on a crowdfunding site can give business owners access to a new group of investors. These investors are looking for new and innovative projects. Cold-calling an investor or a venture capitalist is much more intimidating than posting a project online.
Decades of racial and gender-based discrimination has given many smart entrepreneurs "imposter syndrome." Platforms that offer equity to crowdfunding supporters offer benefits to investors and entrepreneurs. Both will gain confidence in a project.
3. Wealth Becomes Accessible
Not every investor on an equity crowdfunding site is already wealthy. Many are looking for a way to have a stake in a hot startup that can help them to build capital. For investors who lack a background in engineering, energy, or finance, investing in the stock market can be intimidating.
With equity crowdfunding, the terms of building wealth have been completely changing. The average everyday person who wants to be able to learn about investment opportunities can now bridge the wealth gap.
Inequality to access and information persists. Crowdfunding offers value to minority founders and minority investors alike.
Equity Crowdfunding Platforms Offer Even More
Equity crowdfunding platforms promote exciting and innovative projects. With the ability to get a smart and innovative project funded and off the ground, more entrepreneurs have confidence they never had before. There is a gold mine waiting for investors.
There is diverse talent available from equity crowdfunding.
If you want to refine your mission statement on cultural diversity in your company, check out these powerful statistics.