Looking for the "right investors"?
You're looking for "the right investor". Your competition is looking for the right investor. Everyone in your accelerator or incubator is looking for the right investor. Your right investors is also looking for the right investor. Everybody is looking for the right investor! But why? Especially when customers have more money than VCs and Angels...
Oh, the reason that your right investor is looking for the right investor is that:
A. General Partners crowdfunding from a small pool of Limited Partners. Thats how you know crowdfunding works. Sharks do it all the time, with each fund they start they spend years raising money from a small pool of investors. The difference for you is, that you now know better than to pool capital from a pool and know instead to source it from the ocean that is The Crowd.
B. Funds generally want to invest after someone else has. As though due diligence gets solved because someone jumps off the cliff first, which gives them the courage to follow with...more
What Financial Returns Should Investors Expect from Equity Crowdfunding?
It’s no secret that investing in early-stage, private companies is extremely risky. As with any investment, investors need to balance this increased risk with an increased potential reward.
So what kind of financial returns should you expect - and demand - as an equity crowdfunding investor?
While equity crowdfunding is still in its infancy, we can look at a combination of past early-stage investment performance along with some current equity crowdfunding results to begin to build a picture of what types of returns investors might seek.
After all, if there is only a minor boost in returns offered between passive public market index funds and the active efforts involved in screening equity crowdfunding deals, many investors will likely stick with ETFs and index funds.
First, we will look at some private market studies on Angel Investors and Early-Stage VCs that suggest early-stage investments have historically obtained an average ~26% Internal Rate of Return (IRR).
Next, since ear...more
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