As required by The Jumpstart Our Jobs Act of 2012, the SEC will release final regulations later this year allowing everyone and their mother to legally invest in private equity, for as low as $100, without being "accredited" investors.
One downside to this new kind of "public" investing is the crowdfunding sites are required to definitely prove that you are "accredited" by documentation proof or attestation from "authorities"; it's no longer as easy as just checking off a box and claiming you are "accredited" (which is still valid regulations for "private" non-crowdfunded investments). Keep in mind that the "accredited" thresholds were paternistically set 80-years ago in the deep dark depths of The Great Depression by the FDR administration. They knew what was best for you!
Anyway, startup investing provides great returns (26% CAGR) according to this study: http://sites.kauffman.org/pdf/angel_groups_111207.pdf
So, get your cash ready! I'll be allocating 5% of my PP equity to it. The key is to diversify as widely as possible using the minimums as you would do for peer-to-peer lending. Needless to say, the sharks will undoubtedly smell blood, so stick only to the reputable crowdfunding sites.
Equity Crowdfunding / Startup Investing
Moderator: Global Moderator
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MachineGhost
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Equity Crowdfunding / Startup Investing
Last edited by MachineGhost on Fri Apr 11, 2014 8:30 pm, edited 1 time in total.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Re: Equity Crowdfunding / Startup Investing
In the start-up world we have a term for the suckerspeople who do the initial funding. It's called "The Four F's of Seed Stage Funding":
1) Family
2) Friends
3) Fools
4) Physicians
1) Family
2) Friends
3) Fools
4) Physicians
Re: Equity Crowdfunding / Startup Investing
Hilarious!
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MachineGhost
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Re: Equity Crowdfunding / Startup Investing
Reputable sites: AngelList, Wefunder, RockThePost, SeedInvest.
Last edited by MachineGhost on Fri Dec 19, 2014 7:30 pm, edited 1 time in total.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Re: Equity Crowdfunding / Startup Investing
My main piece of advice in this area of investing is very simple:
Do not invest in any company that does not have a working product and at least a few paying customers.
That's the golden rule in angel investing from my experience. No product? No money. The above eliminates a ton of risk from the investment.
Do not invest in any company that does not have a working product and at least a few paying customers.
That's the golden rule in angel investing from my experience. No product? No money. The above eliminates a ton of risk from the investment.
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MachineGhost
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Re: Equity Crowdfunding / Startup Investing
In opposition: AARP, Consumer Federation of America, Council of Institutional Investors and Americans for Financail Reform. 
Seems like its Democrat politics.
As the Delay Continues on Crowdfunding Rules, Concerns About Investor Risks Grow
http://boss.blogs.nytimes.com/2014/05/2 ... more-85477
Seems like its Democrat politics.As the Delay Continues on Crowdfunding Rules, Concerns About Investor Risks Grow
http://boss.blogs.nytimes.com/2014/05/2 ... more-85477
Last edited by MachineGhost on Tue Jun 03, 2014 3:52 pm, edited 1 time in total.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
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MachineGhost
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Re: Equity Crowdfunding / Startup Investing
There's been some encouraging news on this front. It appears the key stakeholders involved (SEC, et al.) realize that net worth or income is B.S. and that adding on financially-sophisticated criteria is the way to go. If the net worth or income requirements were inflation-adjusted to the 1982 values when they were last reset, it would wipe out about 66% of accredited investors overnight.
So it looks like late 2015 is when we can expect the implementing regulations to be finalized. Better late than never, even though this will be a frackin' four years after the JOBS Act. Grrr!
http://www.entrepreneur.com/article/240558
If anyone wants to get into a late-stage pre-IPO fund, there is a public closed-ended fund called SharesPost. No need to be "accredited". Watch the fees, though!
So it looks like late 2015 is when we can expect the implementing regulations to be finalized. Better late than never, even though this will be a frackin' four years after the JOBS Act. Grrr!
http://www.entrepreneur.com/article/240558
If anyone wants to get into a late-stage pre-IPO fund, there is a public closed-ended fund called SharesPost. No need to be "accredited". Watch the fees, though!
Last edited by MachineGhost on Fri Dec 19, 2014 7:36 pm, edited 1 time in total.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
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MachineGhost
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Re: Equity Crowdfunding / Startup Investing
Almost there...
[quote=http://www.washingtonpost.com/news/on-s ... usinesses/]The finalization of the rules was the latest step in what has become an exceptionally long process to breathe life into the JOBS Act. Now on the cusp of its third birthday, only about half of the provisions in the statute – which, by providing better access to capital to new and growing businesses, was touted as a potentially powerful gust of wind in the economy’s sails – have been put in place by the SEC.
Among the most highly anticipated changes mandated by Congress but not yet implemented by the SEC are rules allowing companies to raise small amounts of money from mom-and-pop investors via what are known as online crowdfunding portals. Initially, the SEC was to give that process the green light by the end of 2013; however, the agency has been slow to move on the rule-making process. The SEC put forth proposed rules in October 2013, but it isn’t clear when they will be finalized.
While the crowdfunding rules, which are outlined in Title III of the JOBS Act, have drawn most of the JOBS Act’s spotlight, Paul explained that the Reg A changes (contained in Title IV of the legislation) will likely have a much more significant impact for certain companies.[/quote]
[quote=http://www.washingtonpost.com/news/on-s ... usinesses/]The finalization of the rules was the latest step in what has become an exceptionally long process to breathe life into the JOBS Act. Now on the cusp of its third birthday, only about half of the provisions in the statute – which, by providing better access to capital to new and growing businesses, was touted as a potentially powerful gust of wind in the economy’s sails – have been put in place by the SEC.
Among the most highly anticipated changes mandated by Congress but not yet implemented by the SEC are rules allowing companies to raise small amounts of money from mom-and-pop investors via what are known as online crowdfunding portals. Initially, the SEC was to give that process the green light by the end of 2013; however, the agency has been slow to move on the rule-making process. The SEC put forth proposed rules in October 2013, but it isn’t clear when they will be finalized.
While the crowdfunding rules, which are outlined in Title III of the JOBS Act, have drawn most of the JOBS Act’s spotlight, Paul explained that the Reg A changes (contained in Title IV of the legislation) will likely have a much more significant impact for certain companies.[/quote]
Last edited by MachineGhost on Thu Mar 26, 2015 7:13 pm, edited 1 time in total.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
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ahhrunforthehills
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Re: Equity Crowdfunding / Startup Investing
.
Last edited by ahhrunforthehills on Wed Aug 18, 2021 12:20 pm, edited 1 time in total.
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MachineGhost
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Re: Equity Crowdfunding / Startup Investing
From the Elio folks:
Regulation A+ implements a landmark policy decision because it opens up investment opportunities to non-accredited investors. The potential of a high-profile, potentially high-reward IPO used to be the exclusive purview of those 8 million to 10 million Americans. Not any more. Today, even non-accredited investors can buy-in to an equity crowdfunding initiative for up to 10 percent of the greater of their net worth or annual income.
In addition to opening investment opportunities for the masses, Regulation A+ has significant advantages for entrepreneurs and start-ups. It is a much lower-cost method for accessing capital. And, often the success or failure of a start-up depends on access to funds. Regulation A+ has the potential to jumpstart many successful businesses, which ultimately can create more jobs and a healthier economy. And, that’s a win for everyone.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
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MachineGhost
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Re: Equity Crowdfunding / Startup Investing
Great news!!! Get ready for a new bull market. This is one of those rare few times the government ever does anything smart.
[quote=http://www.crowdfundinsider.com/2015/10 ... is-friday/]The Securities and Exchange Commission (SEC) will reveal the final rules regarding Title III of the JOBS Act this Friday, October 30th. The long-awaited regulations will mark the completion of the bi-partisan bill that was signed into law over three years ago.
Presently Title II accredited crowdfunding and Title IV Reg A+ , are the two crowdfunding exemptions issuers may utilize today. Title III retail crowdfunding may usher in a new generation of small firms in financed in part by many small, unaccredited investors.
The meeting at the SEC is open to the public. It is scheduled to take pace at 10:00 AM in the Auditorium Room (L-002). The proceedings are expected to be live-streamed on the SEC web site.[/quote]
This will also help diversity a lot because 89.8% of Venture Capital firms are run by white, privileged men. They only fund what they can relate to which is why funding rates are so abmysal. Good riddance.
[quote=http://www.crowdfundinsider.com/2015/10 ... is-friday/]The Securities and Exchange Commission (SEC) will reveal the final rules regarding Title III of the JOBS Act this Friday, October 30th. The long-awaited regulations will mark the completion of the bi-partisan bill that was signed into law over three years ago.
Presently Title II accredited crowdfunding and Title IV Reg A+ , are the two crowdfunding exemptions issuers may utilize today. Title III retail crowdfunding may usher in a new generation of small firms in financed in part by many small, unaccredited investors.
The meeting at the SEC is open to the public. It is scheduled to take pace at 10:00 AM in the Auditorium Room (L-002). The proceedings are expected to be live-streamed on the SEC web site.[/quote]
This will also help diversity a lot because 89.8% of Venture Capital firms are run by white, privileged men. They only fund what they can relate to which is why funding rates are so abmysal. Good riddance.
Last edited by MachineGhost on Tue Oct 27, 2015 3:19 pm, edited 1 time in total.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
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MachineGhost
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Re: Equity Crowdfunding / Startup Investing
Awesome! They voted 3 to 1. Get ready for the mother of all bubbles starting next year.
[quote=http://www.forbes.com/sites/navathwal/2 ... pacts-you/]Major shake-ups are a foot for the crowdfunding industry since the Securities and Exchange Commission has approved Title III of the 2012 Jumpstart Our Business Starts Up Act (“JOBS Act”) earlier this morning. The passage of the JOBS act dramatically changes the way start-ups raise capital for new ventures, making it possible for companies to raise up to $1 million annually through equity crowdfunding without having to cut through the red tape of registering those securities with the Securities and Exchange Commission.
For over 80 years, investors have been limited by provisions of the Securities Act of 1933 which enforced strict regulations on the advertisement and sale of securities to the public. Title II of the JOBS Act eased these restrictions but only for accredited investors with a minimum net worth of $1 million or an annual income of $200,000 or more ($300,000 if married). In October 2013, the SEC proposed rule changes for Title III of the JOBS Act that would open up the crowdfunding arena to non-accredited investors. Today’s decision is over three years in the making; a game-changer that’s long overdue.
Going forward, anyone can invest in startups, small businesses or even real estate through crowdfunding, with some protective limitations based on an investor’s income and net worth. So what does the rule change mean for investors and the crowdfunding industry as a whole? For investors, the answer ultimately depends on what they’re investing in and how much money they’re bringing to the table.[/quote]
Fact Sheet: https://www.sec.gov/news/pressrelease/2015-249.html
Dissenting Statement: http://www.mondovisione.com/media-and-r ... s-capital/
[quote=http://www.forbes.com/sites/navathwal/2 ... pacts-you/]Major shake-ups are a foot for the crowdfunding industry since the Securities and Exchange Commission has approved Title III of the 2012 Jumpstart Our Business Starts Up Act (“JOBS Act”) earlier this morning. The passage of the JOBS act dramatically changes the way start-ups raise capital for new ventures, making it possible for companies to raise up to $1 million annually through equity crowdfunding without having to cut through the red tape of registering those securities with the Securities and Exchange Commission.
For over 80 years, investors have been limited by provisions of the Securities Act of 1933 which enforced strict regulations on the advertisement and sale of securities to the public. Title II of the JOBS Act eased these restrictions but only for accredited investors with a minimum net worth of $1 million or an annual income of $200,000 or more ($300,000 if married). In October 2013, the SEC proposed rule changes for Title III of the JOBS Act that would open up the crowdfunding arena to non-accredited investors. Today’s decision is over three years in the making; a game-changer that’s long overdue.
Going forward, anyone can invest in startups, small businesses or even real estate through crowdfunding, with some protective limitations based on an investor’s income and net worth. So what does the rule change mean for investors and the crowdfunding industry as a whole? For investors, the answer ultimately depends on what they’re investing in and how much money they’re bringing to the table.[/quote]
Fact Sheet: https://www.sec.gov/news/pressrelease/2015-249.html
Dissenting Statement: http://www.mondovisione.com/media-and-r ... s-capital/
Last edited by MachineGhost on Fri Oct 30, 2015 1:45 pm, edited 1 time in total.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
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MachineGhost
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Re: Equity Crowdfunding / Startup Investing
Here's the first round of companies I'm investing in:
WeFunder:
Beta Bionics -- bionic pancreas
Shapescale -- 3D scan and image of your body
Qmedic -- technologically up-to-date alert system for elderly
RocketBook -- traditional-style notebook that scans pages to cloud and is erasable in microwave
Italist -- shopping portal for genuine, luxury Italian botique goods from Italy
Veditz -- portal to provide paid mentoring and education for the deaf in their own language
StartupEngine:
Med-X -- safe, natural pesticide and magazine for regulated marijuana growers
Gigmor -- portal to find and directly book musical talent (yeah, the crony agent industry has yet to be disrupted, unbelievable)
XTI Aircraft -- autonomous VTOL business class planes
SweetShine -- all natural, flavored moonshine locally sourced and made in West Virginia
SnapWire -- portal to request custom photography needs from talent
SURKUS -- portal to acquire "talent" for ceremonies, premieres, club openings, Hollywood ballyhoo, etc.
SeedInvest:
DSTLD -- direct to consumer, high end premium clothing
What's everyone think? I am aiming with an eye towards scalability for big profits so I've no interest in small potato startups like donuts, local theatres, etc.. It's got to be worth my time to wait out the 7-10 years.
I put a below normal size investment into SweetShine because I question the scalability and ability to get national distribution away from the major liquor pseudo-monopolists, but it is more compelling opportunity than oh-yet-another craft beer brewery (that market is very oversaturated and ready to implode) or SF-only organic food delivery services, etc..
I'm undecided on Veditz. They seem confused about whether they're providing a deaf community or providing a portal for teachers of the deaf, deaf students, etc.. I question if the scalability is there also, but then the deaf community is very disconnected and isolated worldwide so if they pivot to the former, it may have potential. Will keep on watchlist.
WeFunder:
Beta Bionics -- bionic pancreas
Shapescale -- 3D scan and image of your body
Qmedic -- technologically up-to-date alert system for elderly
RocketBook -- traditional-style notebook that scans pages to cloud and is erasable in microwave
Italist -- shopping portal for genuine, luxury Italian botique goods from Italy
Veditz -- portal to provide paid mentoring and education for the deaf in their own language
StartupEngine:
Med-X -- safe, natural pesticide and magazine for regulated marijuana growers
Gigmor -- portal to find and directly book musical talent (yeah, the crony agent industry has yet to be disrupted, unbelievable)
XTI Aircraft -- autonomous VTOL business class planes
SweetShine -- all natural, flavored moonshine locally sourced and made in West Virginia
SnapWire -- portal to request custom photography needs from talent
SURKUS -- portal to acquire "talent" for ceremonies, premieres, club openings, Hollywood ballyhoo, etc.
SeedInvest:
DSTLD -- direct to consumer, high end premium clothing
What's everyone think? I am aiming with an eye towards scalability for big profits so I've no interest in small potato startups like donuts, local theatres, etc.. It's got to be worth my time to wait out the 7-10 years.
I put a below normal size investment into SweetShine because I question the scalability and ability to get national distribution away from the major liquor pseudo-monopolists, but it is more compelling opportunity than oh-yet-another craft beer brewery (that market is very oversaturated and ready to implode) or SF-only organic food delivery services, etc..
I'm undecided on Veditz. They seem confused about whether they're providing a deaf community or providing a portal for teachers of the deaf, deaf students, etc.. I question if the scalability is there also, but then the deaf community is very disconnected and isolated worldwide so if they pivot to the former, it may have potential. Will keep on watchlist.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
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MachineGhost
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Re: Equity Crowdfunding / Startup Investing
I'm shocked -- shocked! -- that Congress actually does anything useful.
Fix Crowdfunding Act
This bill amends the Securities Act of 1933 (Act) to increase from $1 million to $5 million the aggregate amount of securities sold to all investors by an issuer that qualify for the crowdfunding exemption from certain prohibitions relating to interstate commerce and the mails.
(Crowdfunding is a method of capital formation where groups of people pool money, typically composed of small individual contributions, and often via Internet platforms, either to invest in a company or to support an effort by others to accomplish a specific goal.)
The bill amends the Jumpstart Our Business Startups Act (JOBS Act) to declare that a crowdfunding portal shall have a reasonable basis for disqualifying issuers from offering securities through the portal if through a background check it has found that an issuer has made an untrue statement of a material fact, omitted to state a material fact necessary to avoid making misleading statements, or engaged in fraud or deceit. No intermediary (crowdfunding portal) shall be liable for an issuer's material misstatements and omissions unless, in connection with the offer or sale of a security, it knowingly made or omitted such statements or engaged in fraud or deceit.
The bill amends the Securities Exchange Act of 1934 to exempt crowdfunding securities transactions from its registration requirements.
The Investment Company Act of 1940 is amended to exempt from the definition of investment company, and so exclude from coverage by that Act, any issuer that, for the purpose of making a crowdfunding offering, holds the securities of not more than one issuer eligible to offer securities (a single-purpose fund).
The bill allows single-purpose funds to sell and offer for sale securities according to crowdfunding requirements, and considers them venture capital funds.
The Act is further amended to permit an issuer, before commencing a crowdfunding offering, to solicit non-binding indications of interest from potential investors in the prospective offering if:
no investor funds are accepted by the issuer, and
any material change in the information furnished during the actual offering from the information furnished during the solicitation of interest is highlighted to potential investors in the information filed with the Securities and Exchange Commission.
No enforcement action may be brought before May 16, 2021, against crowdfunding portals established under the JOBS Act.
https://www.congress.gov/bill/114th-con ... summary/00
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
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MachineGhost
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Re: Equity Crowdfunding / Startup Investing
I changed my mind about DSTLD. I don't like their financials. They've never been profitable since inception several years ago, are not the originator of the ethically transparent direct-to-consumer concept and and they're not going to use the funds raised in a manner that is conductive to maximum growth in my view. Sometimes what's great for the consumer isn't great for the investor.
Instead, I'm investing in Hawaii Cider Company at WeFunder which plans to produce locally sourced, organic fruit hard ciders to their existring distribution network as well as offering a first-of-its-kind organic co-manufacturing facility to other local Hawaiian businesses. A real no brainer. It's a good complement to the West Virginia moonshine. Along with soda, beer and wine sales are declining as Millennials just don't drink that boring, fuddy duddy stuff.
So really, no one else is interested in investing in startups? It's a once in a lifetime opportunity and likely the last before post-capitalism. Don't say I didn't warn you.
Instead, I'm investing in Hawaii Cider Company at WeFunder which plans to produce locally sourced, organic fruit hard ciders to their existring distribution network as well as offering a first-of-its-kind organic co-manufacturing facility to other local Hawaiian businesses. A real no brainer. It's a good complement to the West Virginia moonshine. Along with soda, beer and wine sales are declining as Millennials just don't drink that boring, fuddy duddy stuff.
So really, no one else is interested in investing in startups? It's a once in a lifetime opportunity and likely the last before post-capitalism. Don't say I didn't warn you.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Re: Equity Crowdfunding / Startup Investing
I'll take a look at this - keeping Craig's advice in mind, and also after seeing a few episodes of Shark Tank for a refresher course.
Just after a brief peek at WeFunder, I really like the Brooklyn ginger brewery. Not so excited about the bionic pancreas - small market (type 1 diabetes only, not type 2) and it's been tried before and failed. Plus the landscape for medical devices has become really tough...FDA approval is capricious and is likely to take many years.
Just after a brief peek at WeFunder, I really like the Brooklyn ginger brewery. Not so excited about the bionic pancreas - small market (type 1 diabetes only, not type 2) and it's been tried before and failed. Plus the landscape for medical devices has become really tough...FDA approval is capricious and is likely to take many years.
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MachineGhost
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Re: Equity Crowdfunding / Startup Investing
Do you have a link for the failed bionic pancreas? Do note that Beta Bionic is a public-benefit corporation so its not necessarily about making a killing from a liquidity event but doing something good for society. I'm perfectly okay with that. Same for some of the more localized, small potato opportunities that don't interest me.sophie wrote:I'll take a look at this - keeping Craig's advice in mind, and also after seeing a few episodes of Shark Tank for a refresher course.
Just after a brief peek at WeFunder, I really like the Brooklyn ginger brewery. Not so excited about the bionic pancreas - small market (type 1 diabetes only, not type 2) and it's been tried before and failed. Plus the landscape for medical devices has become really tough...FDA approval is capricious and is likely to take many years.
Should I check out the ginger brewery some more? Do they have the desire and capability to scale big time via national distribution? I've already overlooked Cleveland Whiskey and that would have been a huge mistake vs WhiskyInvestDirect. <slaps himself> But that's a very disruptive technology rather than a me too johnny come lately like micro-breweries seem to be. There's like 1500 of them in the USA now and growth is slowing vs alternative liquors.
Also, there are startup ratings from Stratifund available although there's no proof provided that they are any better than throwing darts or your own research. I disagree with their ratings so far based on what I'm looking for. They seem to rate factors other than market potential a lot higher than I would. https://www.stratifund.com/deals
Keep in mind to make this work, you have to invest in at least 20 companies minimum. The failure rate will be about 90% based on venture capital investing, i.e. one or two huge winners that makes it all worthwhile, a small amount of ho hum small potato winners and the rest will all be losers. But VC funds have different needs due to the pressure to invest their huge sums than we do, of course. We can be a lot pickier and take the Buffett approach.
Hey Mountaineer, what do you know or think about SweetShine?
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
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MachineGhost
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Re: Equity Crowdfunding / Startup Investing
Also, always keep in mind the general hierarchery of deal quality as there's now lower tier portals starting to offer deals:
The NYSE is WeFunder.
The NASDAQ is StartEngine.
The AMEX/ARCA is SeedInvest.
The rest are the OTC BB/Pink Sheets.
This could change over time. It's early days, yet.
The NYSE is WeFunder.
The NASDAQ is StartEngine.
The AMEX/ARCA is SeedInvest.
The rest are the OTC BB/Pink Sheets.
This could change over time. It's early days, yet.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Re: Equity Crowdfunding / Startup Investing
There was an "artificial beta cell" project > 10 years ago, and I don't remember where just that nothing came of it. I just looked, sorry...will send the link if I can find it.
There's a lot of competition in this market, and given the effort it now takes for any medical device to get FDA approval, my money would be on a well established device company like Medtronics, not a new startup with zero experience or representation at the FDA.
Not excited about crowd funding though. See below from the WeFunder site:
There's a lot of competition in this market, and given the effort it now takes for any medical device to get FDA approval, my money would be on a well established device company like Medtronics, not a new startup with zero experience or representation at the FDA.
Not excited about crowd funding though. See below from the WeFunder site:
Why invest in startups?
It shouldn't be to make lots of money! This isn't the stock market. Startups are much, much riskier and are likely to fail. Everyone has their personal motivations for investing in startups but ours is to support founders we believe in, pursuing a vision we care about, with a good chance of earning a return should that vision transform into reality.
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MachineGhost
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Re: Equity Crowdfunding / Startup Investing
Republic.co is now live. It is a spinoff of AngelList.co which is the premier early stage investing site for accredited investors. For instance, Uber listed and raised capital on it. No doubt it has good odds to become the premier tier-1 player in the crowdfunding space, but we'll see. Minimums are as low as $10.
https://republic.co/
https://republic.co/
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
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ahhrunforthehills
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Re: Equity Crowdfunding / Startup Investing
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Last edited by ahhrunforthehills on Wed Aug 18, 2021 12:20 pm, edited 1 time in total.
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MachineGhost
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Re: Equity Crowdfunding / Startup Investing
That's all generally true, but VC's need a lot of really big winners because they're dealing with tens to hundreds of millions of dollars in investment capital so their effective and liquidy opportunity set is extremely small. They simply can't invest enough capital in enough small potato opportunities that equity crowdfunding is offering, so you don't need as high a return as an individaul investor for it to be worth your while. So VC's can't really participate in the seed/startup funding that equity crowdfunding represents, but rather via formal series A,B,C,D, etc. financing rounds. And therein lies the opportunity for the individual investor. It's essentially no different in concept than a stock that has little to no analyst coverage and thus no interest by Wall Street. Some companies are going to use all methods of raising funds at the same time, some will do it sequentially as they grow bigger and bigger and some will stick to equity crowdfunding only and never make it out of the ballpark. The signal to noise ratio is never going to be as good as it is right now. In ten years time, the huge returns to vanguard investors will be a distant memory.
BTW, VC's are not really that good at what they do which is why they earn about average 10% returns in the long term. They're not quants but old boy, human centric, subjective networks. Think the pre-Moneyball era in baseball.
BTW, VC's are not really that good at what they do which is why they earn about average 10% returns in the long term. They're not quants but old boy, human centric, subjective networks. Think the pre-Moneyball era in baseball.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
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ahhrunforthehills
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Re: Equity Crowdfunding / Startup Investing
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Last edited by ahhrunforthehills on Wed Aug 18, 2021 12:20 pm, edited 1 time in total.
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MachineGhost
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Re: Equity Crowdfunding / Startup Investing
"Deal flow" is all relative. VC's can't spend their time doing due diligence on 1,000 opportunities with the large amounts of capital they have to place instead of 50 or 100. There's institutional bias and career risk at play. You make it sound like none of these crowdfunding companies are also going to be raising capital from VC's or angel investors. If you're one of those types that need social signaling to feel okay about investing in opportunities, there's some of that going on already.
If you have carved-out stats on angel investments only in under $1 million (Title III) and under $50 million (Title IV) raises, then it would be very germane to the topic. The fan-investor is also a new phenomenom without any stats. So are the investable yearly limits.
Of course this is a small portfolio because of the risk -- I never advocated otherwise. I see all of these new advisory services popping up to provide "due diligence" that follow that old school, cognitivelly-biased model of criteria that you listed -- color me skeptical that any of it is going to forecast the future any better than VC's (who I emphatically do not want to emulate for the same reason I would never give my money to Wall Street). It's like slicing, dicing, tilting, etc. whatever the Bogleheads love to fiddle around with instead of just adopting the PP. This is a diversification-numbers game after using your common sense to avoid opportunities without revenues, profit and scalability. The major difference is penny stocks are garbage nowadays because no one but hucksters raise capital that way anymore. Ten baggers are not there anymore nor is the size effect. And you just can't pull a Templeton in the stock market until there is a secular bear market low again, but you can in crowdfunding during these early stages.
I could be wrong, but Title III & IV opportunities are never going to be amalgated into a portfolio via an investable fund, or it would be easy enough to "index" by buying such a fund as it already is for Reg D opportunities. So you really have no choice here but to buy individual "lottery tickets" as you like to say.
If you have carved-out stats on angel investments only in under $1 million (Title III) and under $50 million (Title IV) raises, then it would be very germane to the topic. The fan-investor is also a new phenomenom without any stats. So are the investable yearly limits.
Of course this is a small portfolio because of the risk -- I never advocated otherwise. I see all of these new advisory services popping up to provide "due diligence" that follow that old school, cognitivelly-biased model of criteria that you listed -- color me skeptical that any of it is going to forecast the future any better than VC's (who I emphatically do not want to emulate for the same reason I would never give my money to Wall Street). It's like slicing, dicing, tilting, etc. whatever the Bogleheads love to fiddle around with instead of just adopting the PP. This is a diversification-numbers game after using your common sense to avoid opportunities without revenues, profit and scalability. The major difference is penny stocks are garbage nowadays because no one but hucksters raise capital that way anymore. Ten baggers are not there anymore nor is the size effect. And you just can't pull a Templeton in the stock market until there is a secular bear market low again, but you can in crowdfunding during these early stages.
I could be wrong, but Title III & IV opportunities are never going to be amalgated into a portfolio via an investable fund, or it would be easy enough to "index" by buying such a fund as it already is for Reg D opportunities. So you really have no choice here but to buy individual "lottery tickets" as you like to say.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
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MachineGhost
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Re: Equity Crowdfunding / Startup Investing
I looked up the stats on angel investments the other day and as far as I can tell from 1990 to 2014, the CAGR stayed remarkably consistent and was almost 27% a year. VC's typically have to invest in later stages at higher prices so their net return suffers and is around the public market average in the long-term (10%). However, the VC world is a lot like hedge funds or smartphones... only a very elite few make all of the profits and all the rest are tertiery losers.
As far as the failure rate on private startups goes, it is 62% for seed/early stages and 52% for mid-to-late stages. But early stages have a 60% increased probability of hitting 10x gains than the later stages. I used to be in a late stage company fund but due to the yearly fees and lack of company interest in IPOing because of the Sarbanes–Oxley Act, I junked it.
Believe it or not, there were actually some 100x+ baggers in the recent past. Netflix is up 92x since it IPOed (no idea on the return pre-IPO, but use your imagination). Pandora went up 181x by the time it IPOed. And YouTube has gone up an amazing 14,000x (not a misprint) to date which may include Alphabet's valuation increase since it was bought out by them. You don't need such riduclous returns to come out ahead, of course, but spread your seeds widely if you want a chance at bagging one.
As far as the failure rate on private startups goes, it is 62% for seed/early stages and 52% for mid-to-late stages. But early stages have a 60% increased probability of hitting 10x gains than the later stages. I used to be in a late stage company fund but due to the yearly fees and lack of company interest in IPOing because of the Sarbanes–Oxley Act, I junked it.
Believe it or not, there were actually some 100x+ baggers in the recent past. Netflix is up 92x since it IPOed (no idea on the return pre-IPO, but use your imagination). Pandora went up 181x by the time it IPOed. And YouTube has gone up an amazing 14,000x (not a misprint) to date which may include Alphabet's valuation increase since it was bought out by them. You don't need such riduclous returns to come out ahead, of course, but spread your seeds widely if you want a chance at bagging one.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!