Crowdfunding is Dismantling Barriers to Capital for Diverse Businesses

Whenever organizations ask small and medium–sized diverse enterprises (SMEs) to name the barriers they must overcome, the list usually includes difficulty accessing capital at traditional financial institutions or lenders, like banks and venture capitalists. Putting their entrepreneurial spirit into action, business owners have found another way to fund startups and various projects through crowdfunding. Brick-by-brick, crowdfunding is tearing down the funding wall that diverse businesses consistently encounter by giving women, minorities and other diverse businesses access to community fundraising.

Banks and other traditional lenders are risk-adverse when analyzing funding requests from entrepreneurs hoping to start new businesses and established businesses needing project or expansion funding. Couple the risk adversity with the well-researched embedded bias in the financial system, and MWBEs and veteran–and LGBT–owned businesses encounter a double thick wall. Crowdfundi...

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