What Is Equity Crowdfunding
Most people have heard of crowdfunding, but equity crowdfunding is a more sophisticated version of the same concept. Crowdfunding allows you to support a cause or project and get something in return. Equity crowdfunding allows you to invest in companies and startups, which means you can potentially see returns on your investment if the company does well. Whether you’re looking for a new way to start investing or just have some cash sitting around that you want to do something fun with, here’s what equity crowdfunding is all about:
Equity crowdfunding allows you to invest in startups, not just give money to them.
When you invest in equity crowdfunding, you’re buying shares of a company and will receive a percentage of profit when the company does well. If that company goes public or gets acquired, your shares could be worth much more than what you paid for them originally. That’s why many investors do this kind of investing: they’re looking to make money on their investment!
The downside is not every startup will succeed; as with any other investment opportunity (like stocks), there’s risk involved when putting your money somewhere new and unknown. With Equity Crowdfunding, you can dive into the founders, the concepts, and sales before deciding to back the company or project.
Equity crowdfunding allows entrepreneurs to raise funds from many people at once.
This is a new way for entrepreneurs to raise money from many people at once. Through equity crowdfunding, you can invest as little or as much as you want in startups, rounds, companies and industries you believe in.
In the past few years, more and more platforms like StartEngine, WeFunder and DealMaker have emerged that allow investors to directly connect with startups looking for funding—which are open to everyday investors! This is a true game changer to the investing industry.
Equity crowdfunding isn’t right for everyone.
Equity crowdfunding isn’t right for everyone though, and here are some things to consider before you decide to invest:
- Are you willing to lose the money you invest? Because if your investment doesn’t pay off, that’s what will happen. You should only invest money that you can afford to lose and still feel comfortable living with.
- Can you wait until your investment pays off? While not all businesses fail, many do—and it can take time for a company’s value to increase enough for investors like yourself to receive a return on their investment. If waiting isn’t something that fits into your life or investing style, equity crowdfunding might not be right for you.
- Are these companies any good? As we’ve said, not every business succeeds; sometimes even an idea with lots of promise fails miserably due to poor management or weak marketing strategies.
You can invest as little or as much as you want.
So, how much can you invest?
The three biggest equity crowdfunding platforms all have similar requirements, but you can expect a minimum donation from $100-$500 depending on the platform and company.
Once you are comfortable with the minimum, It all depends on what kind of return on investment (ROI) and risk level feels right for you.
LaunchBoom is an official partner of Start Engine, WeFunder, and DealMaker
Did you know LaunchBoom works with some of the best companies to launch on Start Engine, WeFunder and DealMaker. Check out a recent campaign we launched for our friends at LIVSN The LaunchBoom system is the fastest and most effective way to raise millions through equity crowdfunding. We work with entrepreneurs, brands, and founders to position their campaigns to create what we call, the LaunchBoom Effect!
As you can see, there are many reasons to join the equity crowdfunding movement. The best way to find out if it’s right for you is by doing some research and seeing if this particular investment strategy feels like it will fit well into your future goals. Good luck!
If you are interested in working with the LaunchBoom team on your equity crowdfunding campaign, please feel free to reach out. We’d love to hear from you, learn about your idea and see how we can help!
You can simply book a call today to get started!