Startups Take Mixed View of Crowdfunding

CrowdfundBeat – Robert J. Mullins – September 16, 2013 – Stanford University has created a nonprofit startup accelerator called StartX with a $3.6 million grant, as well as a separate fund, Stanford-StartX Fund, to actually invest in emerging companies. But StartX organizers and some of the startups themselves see a limited role for crowdfunding in nurturing these fledgling businesses. Crowdfunding certainly helps to develop a prototype of a physical product or to demonstrate some market validation for a company, but here in Silicon Valley, funding from angel investors or venture firms shows a startup is better qualified as a viable business than one that just asks for contributions online, said Cameron Teitelman, founder and CEO of StartX. “In Silicon Valley, if you crowdfund instead of taking money from angels, then it’s a negative signal,” said Teitelman. “They’ll be like, ‘Why didn’t you raise from angels? Could you not raise from angels and you need to get money from random people?’” Teitelman said. Teitelman presided at a StartX event Sept. 12 in Palo Alto, Calif., where 11 startups that grew up within StartX presented their business models to potential investors. It was also a kind of graduation ceremony for companies that worked […]

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