Entrepreneurial Funding Options
There are many methods for funding a start-up business. But did you know there are also many methods for financing your business in the growth stage? As you read this chapter, keep a list of methods and write down which ones you might consider implementing now or in the future.
Introduction
Figure 9.1 An advertisement showcasing the features of the iBackPack.
In 2015, Doug Monahan, the CEO and founder of iBackPack of Texas, Inc., introduced a revolutionary technology package encased in a typical backpack. The iBackPack boasted the capacity to incorporate WiFi/MiFi, a battery system, smart power transfer cables, and a car-charging system - while carrying four notebook computers and their accessories. Monahan promised that the iBackPack would be a "communication hub and corresponding electrical powerhouse for students and business professionals alike". To bring the project to market, iBackPack sought crowdfunding through an Indiegogo campaign that raised $723,395 from 4,041 backers. An additional $76,694 was raised from 252 Kickstarter backers.
In 2016, iBackPack raised over $800,000 to fulfill investors' orders, but the product never materialized. The only update from the company was a Facebook post alluding to issues sourcing "safe" batteries. By 2017, the iBackPack crowdfunding campaign failed to deliver the product promised to its investors. According to an article on the website The Verge in August 2018, the founders of iBackPack were under investigation by the Federal Trade Commission. Although crowdfunding can be a great option for startups, those who abuse the system may find themselves subject to legal action.
Source: Michael Laverty and Chris Littel, https://openstax.org/books/entrepreneurship/pages/9-2-special-funding-strategies
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