Investing isn’t an exclusive clubhouse these days. Anyone with money to put up can be an investor. As Warren Buffet describes it, “Investing is about laying out money now to get more money back in the future.” Deciding to invest is only the first step. And the choices only grow from there.
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There are many types of investment a person can make, from retirement accounts, stocks, bonds, real estate, cryptocurrencies, the list goes on. The type of investment you make really depends on the type of investor you are, but one type of investment consistently gaining popularity is equity crowdfunding.
Equity crowdfunding and Regulation A+ have exploded onto the scene since their inception in the mid 2010’s. These types of investments come with a lot of exciting opportunities and perks for investors, including greater ownership in a company and the potential for greater returns. Investments always come with risk, and among these equity crowdfunding risks are investments which can take years to build a return or end up failing all together. Public Yield is here to help you understand the differences in these types of investments, understand if it’s a right fit for you and how to get started.
Social media has given us many things, including greater connection and access to information we might not be privy to otherwise. If you’re a social media user, you have undoubtedly seen and possibly partaken in some type of online crowdfunding: GoFundMe for charitable donations, Kickstarter for creative ventures, Indiegogo for technical endeavors. Equity crowdfunding, such as a Regulation A+ offering, operates in a similar manner, allowing just about anyone to invest in a company startup. Unlike these other platforms, putting money toward a Regulation A+ startup makes you an investor, as opposed to a donor, and you can therefore earn returns on the money you invest.
Let’s look at an example: Oculus Rift is virtual reality headset maker that was funded on Kickstarter. It initially raised $2.4 million from 9,500 donors, and in 2014 was acquired by Facebook for $2 billion. A similar equity crowdfunding raise would see a $250 investment result in a return of $36,000-$50,000 (this occurred before equity crowdfunding was introduced in 2015).
As with any investment, investing money in a Regulation A+ comes with great risk and great reward. Because many of these companies are startups, there is a greater risk of failure, fraud, doubtful returns and mediocre investments compared to a traditional IPO. But the nature of this type of investment means there’s also a potential for huge returns, the opportunity to invest like an accredited investor and obtain multiple shares, and the prospect of stimulating the economy by helping out small and medium enterprises. Feel free to bask in the personal satisfaction of funding companies of your choosing, just like Mark Cuban and Kevin O’Leary.
Decided Regulation A+ sounds like your kind of investment? Let the fun begin.
One of the most exciting things about investing in Regulation A+ companies is learning about new products and services out there, finding companies with products, interests and visions that align with your own, and the potential to grow with these companies. It can take some research, or maybe you already have a business in mind.
Investing is simple: once you find the Regulation A+ offering you’re interested in, head to their Investor page, select Invest Now, follow the steps and fill in the information required. Most companies at this stage have a minimum investment (on average investors put up a minimum of $250-$500). Once your information and payment are complete, congratulations! You’ve successfully participated in an Equity Crowdfund!
