Imagine buying a house for the first time. Instead of doing research, you decide you are just going to go drive around the neighborhoods you want to live in. As you drive up to that first home, your eyes get big and your heart skips a beat. This is it, you’ve found your dream home. You call the agent, put down the full asking price, and stake your claim in the neighborhood you’ve always wanted to be in.
This week we will talk about securities, which is what you are purchasing when you invest in a startup. While doing your due diligence should come first, some investors tend to stay away from deals that offer a particular security because of the risk involved. While we will get into the importance of diversification down the road, make sure that you understand what you are getting in return for your investment.
Reviewing a business is probably one of the toughest things you will have to go through in this entire process.
"Due Diligence is the mother of good fortune"
- Miguel De Cervantes
The days of seeing handsome returns from public technology companies seem to be on the decline, as more new technology giants continue to stay private. Because of that, the biggest returns seem to be trending towards early investors in private high-growth companies. Wish you would have invested? Well, you probably would not have been able to even if you tried.
August marked three months since the launch of Regulation CF, and while it may not seem like much of a milestone, the amount of activity has provided us with some useful insights. Get a glimpse into what may be the keys to a raising capital making an investment through equity crowdfunding campaign.
Read Time: 3 - 5 minutes
Getting funding for a startup is far from simple. As a founder, swimming through the ocean of articles on developing the best pitch, or strategies to get funding can get pretty tiresome. While equity crowdfunding doesn't require an elevator pitch, we may have found some interesting strategies on putting together a successful equity crowdfunding raise.
Read Time: 3 - 5 minutes
Last week we compared venture to equity funding, and were quite surprised at some of the findings. This week, we decided to take a look at the opposite end of the spectrum to see if we could draw any comparisons between equity crowdfunding and platforms like Kickstarter and Indiegogo. My goal was to find anything that connected the two, and if equity investors shared the same psychology as traditional crowdfunding backers.
This week we take a look into the similarities and differences between venture capital and equity crowdfunding in relation to startup investments on a state-by-state basis. Venture funding has been more difficult for startups to get a hold of, and that was one of the many reasons regulation CF started. It was supposed to provide a better opportunity for startups outside of the traditional tech hubs to raise capital. So with 3 months of data to comb through, we wanted to see if it was actually making a difference.
Remember, before plunging into your next investment, it is always wise to educate yourself on what you are putting your money into. This week, we will dive into which companies provide a convertible security, along with a quick explanation into how it works.