Most wealthy Americans achieved their affluence not by inheritance or real estate speculation but by starting and managing a profitable business.

Unfortunately, most of us don’t have the time, the investment capital or the experience necessary to found and run a successful company. But you can still own a piece of one through the quintessential expression of capitalism: the stock market.

With even a modest amount of money, you can accumulate a fractional interest in many of the world’s best firms.

[ad#Google Adsense 336×280-IA]And owning a piece of a company is a whole lot easier than running one.

You don’t have to sign personal guarantees, hire or fire employees, grapple with an avalanche of federal mandates and regulations, pay lawyers and accountants, or even show up for work.

How great is that?

Of course, some folks don’t have the minimum stake necessary to invest in a company… or to finance their own projects.

Take David Courtenay, for example.

David is a fine musician and the son of Marc Courtenay, a good friend and Oxford Club colleague. Marc introduced me to David years ago at one of our events, and I took an immediate shine to him. The guy is one of those rare people who just exude a positive vibe.

However, the music industry is tough to break into, even for a talented singer and songwriter like David. And, like most musicians, he’s not a candidate for the Forbes 400.

So David turned to crowdfunding.

Crowdfunding is a way of raising money outside the traditional financial system. Instead of using a bank or savings and loan, you can raise money for a project – or a company – by attracting contributions from a large number of people, typically using the Internet.

There are two main types of crowdfunding. The first is equity crowdfunding, where an investor receives shares of a private company, usually in its early stages, in exchange for the money pledged.

The other is rewards crowdfunding, where entrepreneurs – including musicians like David – raise money for a specific project, in this case his new album, by offering rewards (often as much emotional as financial) instead of incurring debt or exchanging equity.

Crowdfunding platforms have been used for everything from scientific research to software development to motion picture promotion.

According to research firm Massolution, crowdfunding ventures raised over $16.2 billion last year alone. There are now dozens of leading crowdfunding sites including EquityNet, Pledgie, Sellaband, GiveForward, FundRazr, Kickstarter, RocketHub, Fundly, Microventures and SeedInvest.

It doesn’t take much to get started. Just a worthwhile idea explained in a compelling way.

For an excellent example of how it should be done, take a look at David’s short video here. (Like me, you may even want to kick in a few bucks.)

Crowdfunding is the next step in private equity, entrepreneurship and the evolving democratization of wealth.

You may not have the money to buy or invest in an apartment building, shopping center, warehouse or business. You may not have enough to meet a brokerage firms’ minimum investment requirements. Or to fund your lifelong passion.

But if you have a great idea – and some facility for explaining it – you can still raise money.

Crowdfunding is your best shot.

Good Investing,

Alex

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Source: Investment U