Alternatives to Crowdfunding

This chapter addresses both legal and business aspects of raising capital by means other than crowdfunding. There are many considerations that should be taken into account when deciding which type of business entity to form. Among them are tax considerations, limited liability, capital structure, management structure, investor preferences, and so on. Peer‐to‐peer (P2P) lending is a form of crowdfunding where lenders and borrowers bypass traditional financial institutions. Borrowers seek loans and lenders provide loans through websites. It is advised that when acquiring an existing business, the buyer should seriously consider asking the seller to provide owner financing. This can be paired with financing from more convention lenders. Sellers providing financing should be sure that they are provided some degree of security.