For tech startups across the state, the barrier to entry for starting a business can be fairly low. All you need to launch an app, software or service is a brilliant idea, about $5,000, tech knowledge, a steady supply of coffee and a lot of sweat equity.
The challenge then becomes, how can these would-be Web moguls scale the business to bring this brilliant idea to the masses?
At the second annual NJ Spark Summit, nearly 200 tech startup entrepreneurs, enthusiasts and investors gathered yesterday at the Hoboken campus of Stevens Institute of Technology to hear experts talk about the pressing issues facing founders. One recurring issue was the challenges of raising capital.
The tech startup community is increasingly looking toward crowdfunding as a viable alternative to traditional venture capital.
"Five to seven years from now, no one will be talking about crowdfunding because it will be a common way of raising money," said Jerry Needel, panelist and head of growth at Indiegogo, the largest international crowdfunding site. "I started in the social media space very early on — 12 years ago — and the crowdfunding industry feels a lot like that did."
Fellow panelist Kim Wales of Wales capital echoed Needel's remarks.
"Crowdfunding is the best way to democratize access to capital, and it's leading us to a new global economic system," she said.
The startup community has high hopes for better access to capital, clearing the way for the next Vimeo or WhatsApp to get off the ground, but Wales reminded attendees that crowdfunding is not just a free-for-all online money grab. Founders may have more flexible terms, but they will be held to an exit payout or regular dividend for investors, no matter what the platform.
But if more money makes for more success among startups, that will mean good things for the economy as a whole.
"The startup ecosystem is a big part of the world's economic future," said Aaron Price, co-founder of NJ Spark Summit, founder of the NJ Tech Meetup and co-founder of livecube, a startup that developed a web app to integrate social media and gamification for live events. "When pockets of startups evolve in different areas around the state, they spur economic growth and engagement in the local communities and schools."
Other capital presentations included "Fundraising Doesn't Have To Suck," a panel discussion with some of the tech sector's most active investors, and "How I Raised Over $100K On Kickstarter," a talk by Matt Hornbuckle, co-founder of Stantt, an online men's shirt retailer that offers 50 sizes based on body scan data.
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