Crowdfunding for Students
It's tough enough being a student with a great business idea. But when you're a student with a great business idea and a pile of student debt, accessing finance to launch your startup is going to prove a challenge.
Even without the current economic climate, someone with student debt and no previous business experience is unlikely to come out of that conversation with a cheque book, a loan and an overdraft facility. The bank of mum and dad is usually open for business, but what if you need a couple of thousand pounds, rather than just a couple of hundred?
Crowdfunding is the perfect opportunity for young graduates who want launch a business after leaving full-time education, or indeed for enterprising students who want to generate an income while they're studying.
It's perfect for two reasons, firstly the fact that crowdfunding works so well with social media means it's ideal for Generation Y who have grown up with friends/fans/followers on a variety of social networking platforms.
And secondly because the promises of money are not investments or loans. The student or graduate is not expected to give up equity in their fledgling business nor add to their already growing debt by paying anything back, instead they maintain complete control over their work or business. This is hugely important if the business is potentially high-growth and might be seeking angel or VC investment further down the line.
Fiona Godsman is chief executive of Scottish Institue for Enterprise, and she is excited by the opportunities that crowdfunding opens up for students.
She said: "At SIE we help students to become entrepreneurs. We identify young people with innovative early stage ideas and provide them with practical advice and support to help turn their ideas into viable business propositions.
"But it's hard for these young entrepreneurs without track records to get financial support, which is why crowdfunding is such a fantastic innovation.
"Not only does it provide them with much needed seed funding, but by doing so, it demonstrates that the business community has faith in their ideas, which gives them the confidence to succeed."