What is crowdfunding?
To put it simply, its is the practice of funding a project or venture by raising small amounts of money from a large number of people, typically via the Internet.
Why should you get started?
Learnings:
- It’s literally a shortcut to years of collective learnings in different geographies, different sectors!
- Imagine it as tuition fee for learning.
Impact / Fulfilment:
- It’s fulfilling to work around entrepreneurs who are full of optimism and energy. It’s contagious.
Returns:
- It’s one of the best asset class in the west & hopefully across the world soon (except bitcoin which we can say in hindsight)
- Returns are ruled by not so intuitive as the power law
Prerequisites to get started:
To be precise:
- Credit Card
- A self-declaration (online form) that you are an accredited investor
- An account in one of the crowdfunding platforms (like Seedrs / Republic / Crowdcube)
- $10
My Personal experience
So after starting in October 2018:
- 40% of all my savings are invested in startups
- 16.5% up at avg holding period so far is around 1 year
- 6X returns on my best investment followed by 3X
- 5 follow up rounds raised, 1 down round so far
How should You start?
Write a Hypothesis and test out:
- Write about Why you want to invest in the company
- Track the progress of the company via quarterly updates
- Validate/invalidate your hypothesis
- Refine your thinking process
- Repeat!
My advice: Invest with a purpose and reason!
A thread on investing in startups (both sides of the coin)!
And this one talks more about the risks, perils and reasons to stay away