The Regulation Crowdfunding opened new financial opportunities to every US resident. Luckily, the benefits of participating in new crowdfunding deals bring not just financial gain to the crowd. Here are the values that you get when investing in the next crowdfunding opportunity:
Finally everyone can be an investor in promising startups and fast-growing small businesses. We do realize that it takes some experience to identify good investment deals and make smart investments. Startwise team members have expertise in venture capital, portfolio management, business funding and the risks associated with investing. So we decided to make some research and put together a useful checklist to help you navigate the investment game.
When it comes to crowd investing, there are two main options: equity and debt. In equity-based crowdfunding, investors fund a business in exchange for equity - the ownership shares in the company. In this model, they usually get a return on their investment in a one-time payment and only when and if the business is acquired or goes public (‘has an exit’). Unfortunately, statistic shows, that only 1 out of 10 companies get acquired or go public, and there is always the chance that the value of purchased shares could fall below the original purchase price.
There has been a lot of hype during the past few years about the JOBS Act. So far, it’s felt like a new neighbor that just got settled into the house down the block. This hype has been amplified by the Regulation Crowdfunding which allows non-accredited* individuals to invest in private companies.
Any type of investing is risky - and not just because approx. 50% of new companies fail within the first year. Businesses are affected by a number of external powers and they can’t control all of them, no matter how strong the team is. If you would like to minimize the risk while potentially receiving significant financial returns, starting crowd investing may be worth trying.
If you are looking to start investing in startups and small businesses (maybe you are crowd-investing?), you need to understand what happens after the investment. Here are the basics to pay attention to:
Investing is not easy - every successful investor has a strategy and rules they follow in order to try to minimize the risks and maximize the profits. Here are some rules to follow, based on the advice from Warren Buffett and Steve Anderson (Baseline Ventures).
When investing in businesses, most investors follow their own investment strategy that is based on their knowledge, experience and expertise as well as personal values. Here are some tips on creating own investment strategy:
According to the Small Business Administration, approx. 500,000 new businesses are started every year in the United States. Obtaining financing for small-business entrepreneurs is often hard and they tend to turn to friends, family or acquaintances for funding. When you face the opportunity to invest in a business, what are the things to look at?