Equity Crowdfunding

The portfolio approach to investing in startups

Should startup investors bet heavily on one sexy startup? Or, should you keep your investments in startups relatively small and spread them out over multiple early stage companies? This question of how many startups an investor should invest in is one of the most frequently asked questions in the startup investing world. For people who invest in venture capital funds, it’s not really a question they need to address. They assign a representative — a venture capital fund — to make investment decisions on their behalf. But with the rise in popularity of angel investing and crowdfunding, investors are becoming more active in the startup investment process. The issue of the right number of startup investments an investor should make becomes a more integral part of the investment process. 2 approaches to investing in startups Concentrated, large bets: This approach is all about zeroing in a single or small number of investments with a relatively large bet on their success. It’s like a sniper who is down to just a couple of bullets in his investment gun. When he pulls...

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On Crowdfunding: An interview with the award-winning journalist, Amy Cortese

Amy Cortese is an award-winning journalist and author who has written extensively on crowdfunding. Her book, Locavesting: The Revolution in Local Investing and How to Profit from It addressed an early, growing trend of investing locally and she recently penned an article for the New York Times entitled “ The Crowdfunding Crowd is Anxious about recent developments in the crowdfunding sphere. I recently had a chance to ask Amy a few questions on the connection between local investing and crowdfunding. Why do you think investing in local communities is so important, and how are investors accessing local opportunities? Amy Cortese: At a macro level, small businesses are having a hard time obtaining the capital they need to grow and expand, and that is holding back an economic recovery, since small, young firms create the bulk of jobs in this country and drive innovation. But there’s a more intimate side to this as well: across the country, many communities are struggling. Their downtowns and Main Streets have chipped away by box-box stores, strip malls, e-commerce and globalization. And that affects tax revenues,...

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The Crowdfunding Revolution: Interview with crowdfunding expert, Dan Marom

We recently had the chance to sit down with Dan Marom, an expert and leading author in the crowdfunding space. We asked about the current market dynamics for investing in startups and how crowdfunding is impacting efficient flows of capital and (hopefully) will lead to better returns for investors. :::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: Why do you think there needs to be a revolution in raising capital? Our current system is outdated and entrepreneurs are faced with a difficult economic climate, hindering their ability to raise capital. Many of the laws governing fundraising were created during the Great Depression. Unfortunately, the current economic state and status of the financial services industry does not make that easy for an entrepreneur any longer. Policymakers and regulators around the world are beginning to recognize the benefits for crowdfunding in supporting both innovation and job creation. Recently, we published A Framework for European Crowdfunding, a call-to-action for European policymakers to legalize equity crowdfunding. It’s a great resource for the scope of the current state of the economy and the way crowdfunding will be impactful in a positive way....

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