How To Invest In Start-ups
There are numerous examples of startup companies succeeding and, as a result, making the people who have invested in it immensely rich. In fact, investing in a business at the start of its lifespan can be quite beneficial.
However, it appears that startup financing is limited to rich investors, rather than the normal middle-class person.
Fortunately, investing in startups by common individuals became simpler in 2012 with the adoption of Jumpstart Our Business Startups Act (JOBS). This act simplified certain federal securities restrictions and made it simpler for entrepreneurs to look for capital via crowdfunding. In the year 2016, the Securities and Exchange Commission agreed to establish laws that made crowdfunding much easier.
Before you start investing in start-up companies, you should take into account that many of these companies may fail, even investors will have to walk away empty handed. It is actually a high-stakes, high-bonus sort of venture.
In some cases, start-ups will let you receive your money back even if a business fails to raise adequate money and has given assurance to give back your money.
So, with the platforms described below, you will be able to invest in a company even with a small budget. These platforms can help you broaden your overall investment portfolio while also allowing you to feel good about supporting an immature firm that you trust.
SeedInvest – It is a crowdfunding platform that lets people invest in start-ups that have already been pre-qualified for feasibility. SeedInvest claims that lower than 1% of startups seeking finance via this platform has been acknowledged. The company is reported to have over 250,000 investors and has successfully backed over 150 businesses.
Once you create an account with SeedInvest, you will be provided with a list of firms that are in need of money. Many companies accept contributions from anyone, while some need huge sums and are only open to authorised investors who have managed to earn more than $200,000 in the previous two years.
Wefunder – By the year 2029, Wefunder hopes to have funded over 20,000 new businesses. It intends to do so by receiving investments of only $100 at once. With this platform, a normal investor can insert funds into a wide variety of businesses. It was sanctioning investments in hundreds of firms which included a showbiz company owned by a fan, a vegan market, and a brewing company. Through this platform, an investor can buy stock, convertible currencies, or loan. From 2012, Wefunder has been receiving $110 million in funding and has helped more than 300 businesses.
Republic – This online marketplace lets people buy a stake in start-up firms. With this platform, you will be able to begin even with only $10.
MicroVentures – This platform allows for initial phase and advanced stage start-ups investing with just $100.11. The company has loads of businesses to invest in, ranging from a maker of in action mobile sports games, a digital marketing and exhibition company, and a producer of premium tequila.
These crowdfunding platforms have created opportunities for anyone to invest in startup companies.