Startup ventures have sprung up all over the country in the last decade, especially in California’s Silicon Valley. To name only a few that have grown into billion dollar industries, consider: Facebook, Instagram, Airbnb, Square, Docstoc, Zappos.com, and Gofundme. Many of these startups were founded by young adults, even teenagers, who suddenly found themselves in the same income bracket as heavyweights like Donald Trump and Bill Gates.
So how did they do it? Many actually started with small business grants (similar to a loan except that it doesn’t need to be paid back.) However, the eligibility requirements have become increasingly difficult to meet, as are those for government loans. Below are restrictions for both:
Small Business Grants: Most entities that issue small business grants attach stringent conditions for how the money is used. If you do not comply with those conditions, you may have to pay the money back, destroying the possibility of your business succeeding. Examples of these conditions are using the money only for:
Research and development
Advertising and promotion of the grantor’s interests
Charity and non-profit related works
Various other aims as specified by the grantor
Government Grants: Government grants are even more difficult to receive and the limits on how you can use the money are very limited in scope. Most require that you only spent on promoting tourism or a similar specific interest.
Crowdfunding is defined as “the practice of funding a project or venture by raising many small amounts of money from a large number of people, typically via the Internet.” A relatively new concept, it has been the new trend in getting startups up and running. Literally everyday new sites are forming and providing alternative funding for startups.
A crowdfunder can invest up to one million dollars per year, which is close to no regulations at all (at least as the federal government is concerned.)
Permit inexperienced investors with minimal funds to invest in highly risky startups.
More options to choose from when it comes to supporting small-scale business lacking traditional support of high-profile venture capital firms.
Some crowdfunding sites include:
Indiegogo– Accepts all projects without review. A 4% success fee will be applied and 9% if you fail to reach your goal
RocketHub– Specializes in arts, science, education, business and social good ventures
Peerbackers – Top crowdfunder in the industry. Focuses on entrepreneurs and innovators involving creative, civic, and entrepreneurial projects both in the U.S. and internationally and recently expanded to include young entrepreneurs ages 13 to 17.
Kickstarter – Focuses on design, the arts (film, publishing, music), gaming, and technology. Also available for businesses’ in the U.S. and internationally.
SoMoLend. – Focuses on friends-and-family loans, accredited investor loans and bank loans to business borrowers that already have customers and profits. Also must be in business for at least a year.
Endurance Lending Network – Web-based and connects small businesses searching for a maximum of $500,000 debt capital with nontraditional lending sources.
CircleUp – An equity website with a focus on high-growth consumer products and retail companies.
Angel List – Also known as the Match.com for early-stage startups. Must have already raised $100,000 in seed funding and be incorporated in Delaware.
Technology is changing every day and the internet has become a hub for creative and innovative ideas, helping those without access to traditional venture-based funding, build a successful business. However, the rules for complying with applicable laws and regulations remains complicated.
LegalMatch.com connects entrepreneurs with experienced business attorneys who will assist you in filling out funding application and successfully launching your new venture. Also check out LegalMatch’s LinkedIn page for new trends in the law. For additional information about how LegalMatch works for attorneys, check out this LegalMatch Review.
There are eleven different corporation types that can be formed in the United States; however there are subtle differences and varying rules that govern formation depending on the US state - a brief over view of the types:
Business Corporation: This is a corporation formed to engage in commercial activity for a profit. Also known as a "for-profit" corporation.
C Corporation: A type of corporation whose income is taxed through the corporation rather than its shareholders. A corporation is a "c-type" by default in the eyes of the IRS unless designated an "S-type".
Close Corporation: A corporation with freely traded stock that is held a limited number of shareholders (e.g a family). The requirements vary by state.
Controlled Corporation: The majority of stock is held by one individual or company.
Cooperative Corporation: A corporation that provides to its members services and profits rather than for corporate profit. The most commonly used to purchase real estate.
Foreign Corporation: A corporation registered in one state, but is also “authorized to do business” in one or more different states.
Non-Profit Corporation: Organized for some purpose other than making a profit. Non-profits generally get special tax treatment.
Private Corporation: A corporation founded by and composed of private individuals principally for a nonpublic purpose, such as manufacturing, banking, and railroad corporations (including charitable and religious corporations).
Professional Corporation: A corporation that provides services that requires a professional license such as architects, accountants, attorneys and doctors
Public Corporation: A corporation whose shares are publicly traded but are government-owned, for example the US Post Office.
S Corporation: Its income is taxed through its shareholders rather than the corporation itself. IRS rules limit the number of shareholders.
Business Corporation, C Corporation, Close Corporation, Controlled Corporation, Cooperative Corporation, Foreign Corporation, Non-Profit Corporation, Private Corporation, Professional Corporation, Public Corporation, S Corporation
More information about various lawyer referral services available in the USA continues with another foru states highlighted in various LegalMatch Law Library Articles about lawyer referral services.
Attorney Referral Services in Ohio The Ohio State Bar Association does not have a lawyer referral service
of its own. Instead, you’d probably have to contact your individual
county bar association to find out more about local referrals. But
unlike other states, Ohio does have an “Attorney Specialization Program”
that allows attorneys to claim a specialization in a particular field
of interest. So, if you need a certain specialty attorney, you can include that information in your search.
Attorney Referral Services in Oklahoma The Oklahoma Bar Association offers a limited “Find A Lawyer” service on
its website. Simply pick the legal area that you are concerned with
and your location, and a list of lawyers who fit those requirements
appears. However, there is no additional information available about
these attorneys. Also, while this service is free to use, there is no
information concerning the cost for your first visit with your lawyer.
Attorney Referral Services in Rhode Island The Rhode Island Bar Association offers a handy attorney referral
service. This service is reached by telephone. After providing some
basic information about yourself and your legal issue, a lawyer referral
will be provided to you. This service is free of charge. Also, the
initial consultation with your lawyer is free of charge.
Attorney Referral Services in Texas Texas lawyer referral services are typically arranged according to
geographic region, as in “Lawyer Referral Service of Houston”, “Dallas
Lawyer Referral Services”, etc. Also, Texas counties often have a
specific bar associations that include lawyer referral services.
As we noted in last week's post on lawyer referral services, there are a myriad of public, private and quasi public services and organizations, including LegalMatch, that are engaged in providing a meaningful and convienent way to find a lawyer. That said, some are better equiped at gicing the potential client a choice in their representation. Below are a continuation of last week's list of articles appearing in the LegalMatch law Library that examine the various lawyer refferal service options in each state:
Are you seeking legal advice or representation on a business law-related issue? Perhaps you're an attorney who specializes in business law? The LegalMatch Business Law Blog is the online source for relevant and informative articles and information. LegalMatch offers an authoritative and trustworthy voice on the issues of the day as they concern the legal industry and you as a consumer. Please note, the articles and information in this blog are for informative purposes only. Always consult the professional advice of a lawyer for your particular legal issue. Enjoy!