@sahil-sorathiya, an investor in 70+ Startups is here to free you from all Your worries around Equity Crowdfunding.
Feel free to ask anything
New to Crowdfunding?
Go through our simple guide and clear your basics!
@sahil-sorathiya, an investor in 70+ Startups is here to free you from all Your worries around Equity Crowdfunding.
Feel free to ask anything
New to Crowdfunding?
Go through our simple guide and clear your basics!
Can Indian Founders raise money via platforms such as Seedrs?
Would you recommend founders as all the investment can amount to nothing (due to the “all or nothing” policy) if the target isn’t met?
What are the benefits of equity-based crowdfunding as opposed to rewards-based crowdfunding?
What factors do you keep in mind while analyzing any company?
As a beginner, these points will come in handy for me!
Which all markets have you explored?
Have you also invested in campaigns through indiegogo/ kickstarter?
Which apractice has a better risk/reward ratio overall, stock trading or equity crowdfunding?
Indian entities are not allowed to raise funds by crowdfunding. If the companies are formed out of US, they can raise crowdfunding in US and similar for UK. However I recommend talking to a lawyer to figure out the compliance and regulations around this.
You get shares in the company, so if the company provides value to its user and does well, its share price will increase, and your money that invested will also increase!
There are a various way to evaluate.
But what one needs to understand is that early investing in a company without revenue and proven business model is risky. Its highly illiquid, risky and all your money can to zero if the company doesnt succeed. The chances of the money getting to zero is high.
That is why it is recommended that you invest an amount that you are absolutely okay to loose.
One more important thing is that crowdfunding follows same trends as venture capital and hence follows power law. Which means only 1-2 investments out of a lot of them will work out. So if you need to get good returns then they must have like a 100X return.
So invest in a company that can grow your money to 100X, that’s my only rule.
I have explored European, UK and US markets as of now. There are a bunch of platforms for Latin America as well.
I have not invested in campaigns via indiegogo and kickstarter. There one doesnt get any equity and I didnt find any project that I will want to back yet.
Usually if you see the returns of Venture capital - its quite risky, illiquid and top 25% of the VC have higher returns when compared to stock market. However on average, they yield less compared to a simple Index fund (say for Nasdaq).
Risk reward ratio heavily favours stock marketing investing (not trading) if compared with Venture Capital. Venture Capital is a way to get into a riskier asset class that has the potential to return more but comes at a high price in terms of risk and liquidity.
Also equity crowdfunding is new, one doesnt have enough data to say how much returns are there.
More on VC returns here