As hot start-ups absorb more venture capital and drive some valuations into the billions, crowdfunding has emerged as an alternate route for entrepreneurs including celebrities to gain financing and traction.
Signed by President Barack Obama in 2012, the Jumpstart Our Business Startups (Jobs) Act allows small investors to buy shares of start-ups in much the same way they purchase shares of publicly listed companies.
This route is called equity crowdfunding, and music industry veteran Quincy Jones is the latest celebrity to turn to the emerging funding platform.
New York-based Playground Sessions is a virtual way for students to learn to play the piano. Co-created by Jones, it has turned to equity crowfunding platform Crowdfunder.com. Jones and CEO Chris Vance are seeking $1.5 million in capital, and so far have raised $810,000.
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"The collective is always more than the individual, which is true," said Jones on raising capital. He has led this round of crowdfunding. Jones declined to say how much of his own money he has invested.