8-Year-Old Sells Hot Chocolate, Donates Profits To Hospital That Saved His Friend's Life

March 10, 2015 2:15 PM

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Are there people in your social network who may be willing to help you bankroll your business? Need a way to reach them and a way to handle logistics? Try crowdfunding. Used by both young startups and established small businesses, crowdfunding enables entrepreneurs to raise a pile of cash in small increments from those they already know and from complete strangers. Interested businesses can sign up for one of the many crowdfunding platforms and create a profile that reveals why they're seeking financial support. Once the campaign is designed, crowdfunding services help users promote their campaigns via e-mail and social media. In most cases, crowdfunding services require entrepreneurs to create a goal for contributions (generally less than $50,000), along with a deadline to achieve that goal by. The services typically take a 4 to 6 percent cut of the funding goal if it is reached, and often hold the donations that come in until the goal is met. If the goal is not met by the deadline, some crowdfunding sites will return the funds to the donors, while others will take a cut of the donations that's larger than if the goal had been reached. Click here for a primer on crowdfunding etiquette.

AngelList is a social network that connects startups with investors. An Atlanta-based startup that sells medical iPad apps, for example, can sign up on AngelList to connect with an investor interested in bankrolling a healthcare startup based in the South. How exactly does AngelList work? Startups c...

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