Crowdfunding a good or bad move for your business?

It's time for a reality check on crowdfunding for business startups: only use when necessary, because - even though it has good short-term income, it does not provide enough long-term income. When we put it into perspective, crowdfunding is an excellent tool for individual projects, but it should not be a significant source of funding for businesses.

I really find that crowdfunding is best for those individuals who're doing private projects or their own freelancing motives. But, as for a business, I'm a bit skiddish for many reasons...

1. Startups on crowdfunding cannot sell shares to investors. Entrepreneurs typically sell stuff, which can have good perks, yes. However, it's not good equity. Let me repeat: no sales to investors. That can be really risky, especially if you want all equity to be attributable to investors. In this fashion, you get better stock futures, anyway.
2. Even though the JOBS act was approved in 2012, it hasn't opened the door yet for large-scale angel investment. There are still old regulations in place that formed in The Great Depression. The SEC has yet to do anything, still.
3. Startups are not legally allowed to ask for investment on the web, or at least ask investors. (Unless there is approval from the appropriate regulatory agency.)
4. It may be the opportunity to test an idea, but the risk is greater than the average size risk in any company. Most crowdfunding campaigns fall dead, much like most startups.

 As it stands, crowdfunding is assuredly your choice, but evaluating risks carefully first is the way to go. Think smart about crowdfunding first, and hope for the best.

What is your advice to those needing crowdfunding? Comment now, below.