Entrepreneurs Tap Social Networks

(Wall Street Journal) — When recent college graduate Bronson Chang wanted to renovate his uncle’s candy shop in Honolulu, he decided to tap his social network for the funds via a “crowdfunding” website, instead of seeking a loan at a bank.  Crowdfunding sites—such as ProFounder.com, Peerbackers.com, Kickstarter.com and IndieGoGo.com—allow entrepreneurs to raise money collectively toward a monetary target. Entrepreneurs can create a profile on a crowdfunding site listing their monetary goals, an explanation of how the funds will be used, and an end-date for the campaign. Once the information goes live on the site, investors can pledge money toward the entrepreneur’s goal. These sites typically take a small percentage of the funds that an entrepreneur takes home.

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