Both novice and experienced investors increasingly turn their attention to crowdfunding as a source of income. This approach not only aids in portfolio diversification but also offers high potential returns.
What is it?
Equity crowdfunding (crowd - crowd, invest - to invest money) is a form of venture investing. It is a method that allows the pooling of capital from numerous individuals to purchase shares in companies outside the stock market. In the event of the project's success and proper utilization of the raised funds by the business, shareholders will reap profits. Conversely, if a company performs poorly, investors risk losing their invested capital.
Advantages of Crowdfunding
With a large number of participants, the entry threshold is relatively low. This allows even investors without their own capital to begin investing.
High potential returns. Thanks to the raised funds, companies can demonstrate dynamic growth while ensuring they reward shareholders for their trust.
Valuable connections. Investors have the opportunity to meet many useful contacts in such projects. These connections will undoubtedly prove invaluable to shareholders in the future.
Disadvantages of Crowdfunding
Companies often may not meet expectations. Due to poor management and low-quality oversight, projects can fail, resulting in investors losing their funds.
Investment objects must be thoroughly vetted; it is unwise to entrust your money to the first startup you come across.
Low liquidity. Stocks cannot be sold with a couple of clicks on the stock exchange; investors will have to independently find a buyer and negotiate the price.
Where and how to invest?
There are only two methods:
Find a buyer independently, which comes with significant risks of encountering inexperienced managers or falling victim to scams.
Turn to already existing platforms.
A crowdfunding platform is a space that allows you to invest in interesting companies conveniently and safely. There are numerous such platforms available online, including elite options for seasoned investors with substantial capital (Planeta, Город денег, Boomstarter, StartTrack, Kroogi, Поток, etc.).
