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Crowdfunding is everywhere and used for nearly everything.
Who hasn't been approached about supporting a Kickstarter campaign to help fund a new mobile game, a documentary film project or a charitable cause? The campaigns are largely non-equity, however, offering no future reward or ownership stake.
But plentyof companies are using crowdfundingto raise money from individual investors with a couple hundred or couple thousand dollars to sp end.
In return, the companies provide investors with ownership stakes in an idea that may deliver big returns at some point. The investment, of course, could be lost if the company or project never gets off the ground.
Early-stage investors take the riskbecause they see the potential and hope for the "home run" of a big payoff, said Christopher Cassel, a certified public accountant with Manheim Township-based RKL Wealth Management LLC. "This is where you can turn $2,500 into $250,000."
Before investing in an equity crowdfunding campaign, here are the six things you need to ask yourself or your financial planner, according to Cassel.
Why am I doing it?
One answer is that you're supporting a friend and can afford the loss if the venture doesn't go well, Cassel said. The other is that it's a legitimate business...