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501c3 and funding

 
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Newstart

posts: 1

Feb 25, 2009 5:16 PM ET    Quote  Report Abuse
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Hello,
 
  As an aspiring diabetic food product manufacturer, I am seeking $200K in seed money. The other day, a business consultant suggested that I form my company as a 501c3 so that investors would get a tax deduction for donating money to my company.
 
 What do you think? Good idea or bad idea?
 
 
 
robertj

posts: 1458

Feb 25, 2009 7:27 PM ET    Quote  Report Abuse
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Without more details - I can only give general answers.
1. There is some time and effort involved in getting approved as a charitable non profit.
2. Charitable organizations cannot sell stock or other securities. You may be forever dependent upon receiving donations.
3. People give to charities for different reasons than they invest in new companies
4. The dynamics of starting and expanding a charity are much different.
 
Generally, if your primary reason for establishing this as a charitable business is to allow for a tax deduction, I`d say it`s probably not going to get the results you want.
 
Send me a PM or contact me directly if you want to discuss the details of your specific situation.


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tmerrill

posts: 58

Aug 06, 2012 8:30 AM ET    Quote  Report Abuse
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It sounds like you just want to make it easier to get the $200K.  Sadly, there is no easy way to raise that kind of money.  You are going to have to work very hard to get it.  I would focus instead on proving that you have a great business idea and getting in contact with the right people.



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I help entrepreneurs to start and run the small businesses they always dreamed of owning so they can fire their bosses and gain the freedom they deserve.
infinique1

posts: 178

Aug 28, 2012 1:30 PM ET    Quote  Report Abuse
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It's easier to get seed money from your relatives and friends.



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Seo Consultant | Rattan | Microsoft Dynamics Nav | Autism Singapore | Industrial For Rent | Business Park | Gallbladder Surgery Singapore
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