In recent years, crowdfunding has become a popular way for people to raise money online for their businesses. The idea is simple, set a goal and time frame, explain your business idea, get the word out there, and let people donate money toward your cause. Usually, companies looking for donations via crowdfunding offer incentives for certain amounts of donations, but one company has an idea to do it differently.
Relatively new to crowdfunding, Upstart has people looking for start-up capital offer an investment in future earnings. The website calculates how much you can raise for one percent of your future income. Following approval, you set the amount you want to raise and how much of your future income you are willing to give to investors (up to seven percent). Backers make payments in $100 increments and it is your choice whether or not to accept an investor’s offer. Investors get paid back based on the percentage of your future income that you specify for 10 years.
If you are thinking Upstart sounds more dangerous to your future income than other crowdfunding options, don’t worry. Upstart’s system does have safeguards built in; there is a cap on how much money investors give back, and the ability to waive payments if your income is becomes too low (with the trade off being another year added onto your payoff time, up to an extra five years).
Think this sounds like it could be good for you? You can learn more on their website, but know that not all people looking for funding will be accepted. In their first year, only 83 applications were accepted by Upstart. A smaller group allows backers to choose from only qualified applicants.
So if going the traditional route for raising funds doesn’t seem like it would work for you, consider this another option. Upstart’s crowdfunding approach brings a new idea to raising funds, and one that has already changed many lives.