All you need to know to get started on Crowdfunding

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:

  1. Credit Card
  2. A self-declaration (online form) that you are an accredited investor
  3. An account in one of the crowdfunding platforms (like Seedrs / Republic / Crowdcube)
  4. $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:

  1. Write about Why you want to invest in the company
  2. Track the progress of the company via quarterly updates
  3. Validate/invalidate your hypothesis
  4. Refine your thinking process
  5. 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

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