Offering the precise definition of a start-up can be a challenge... When talking about a "start-up" one may be referring to:
Regardless of how a start-up is defined, this type of business normally to requires large amounts of money and good connections to invest and earn. However, this has changed through crowdfunding platforms. Any investors, regardless of their access to capital or connections can invest in start-ups.Theoretically, the initial investment is potentially lucrative, but comes at a great risk as majority start-ups eventually don’t make it.Taking the risk in account you can invest in start-ups with the potential of generating high returns.In order to do so we recommend you the following advice:
Ordinary people can invest in start-ups through crowdfunding platforms. Start-up investment platforms offer a thorough selection of companies in which the individual will be able to invest for a minimum capitalThe main players in the crowdfunding start-up space are:
"Thousands of companies apply to raise funds on our platform every year, and we approve only about 3% of them," says Kendrick Nguyen, CEO of crowdfunding platform Republic.Most of the sites noted above allow you to start investing in start-ups with as little as $100, while SeedInvest requires at least $500 of investment.AngelList is a leading platform in the start-up investment field, but only admits accredited investors with income of at least $200,000 ($300,000 if married) or a net worth of at least $1 million, excluding your primary residence. Minimum buy-ins on AngelList are at least $1,000.Here in Brickken, we have a established the minimum investment to be of 100€, but our business model is completely different from other crowdfunding platforms, as we tokenize the startup, so the investors can engage in new business models created on top of the token issued by the startup.
Non-accredited investors (anyone who does not fall within the definition of an accredited investor) should note that there may be a limit to investing in crowdfunded companies during any 12-month period.
According to SEC guidelines:
Natural persons residing in the European Union who have expressly requested to be considered a qualified investor and who meet at least two of the following three conditions:
Just because you can invest a certain amount in new ventures doesn't mean you must invest everything allowed. The right amount to allocate should not be more than the investor can comfortably lose if the startup goes bankrupt or takes a particularly long time to pay off. Experts generally recommend making several small investments in different start-ups, rather than one large investment in a single start-up. In fact, AngelList even writes in its investment guidelines that "you should only invest if you have enough capital to make 15 to 20 initial investments."This provides diversification, since if you invest in five start-ups and four of them fail, you still have a winner, which can help protect or recover some of your initial investment.
When you invest in a start-up through a participatory funding or crowdfunding site, you sign an investment contract with the company. Generally speaking, there are four different types of investment contracts, each of which offers different ways to make money on your investment, these are:
For these and other reasons Bitcoin and other cryptocurrencies are the perfect environment for speculators to proliferate, and are looking for high rentabilities without considering the risks associated with these type of investments.
Investing in a new business idea (startups) places you in a privileged position in the process of developing new technologies or solving a problem. It also brings the following benefits:
Startup investing isn't for everyone, least of all investors who want stable, recurring, low-risk income. Startups are very risky. Approximately 90% of all start-ups end up closing due to a lack of fit between product and market, marketing problems, team issues, among others.In general, start-ups are only a good investment if you're prepared to lose 100% of what you're betting. Ideally, the vast majority of your capital should be invested in index funds and exchange-traded funds (ETFs), or even just individual stocks. Start-ups are illiquid investments. If you were to buy a share of a publicly traded company and change your mind tomorrow, you could easily sell that share in the public market. Start-ups are generally very illiquid. When you invest in a start-up, you should keep in mind that the capital will be tied up for at least three to five years, if not longer.It takes time to see results. Even if a startup is successful, it may still take several years before a result from your investment materializes.
How you approach the initial investment will be unique to you and your financial situation. Experts recommend doing a lot of research before you risk your money. You should be able to answer these questions before making an initial investment:
The question of whether or not to invest in startups depends largely on your circumstances. Are your finances in good shape? Are you having difficulty paying your debts or reaching your savings goals? That is why, in the past, startup investing was only available to accredited investors who already had substantial incomes and high net worth.Now that crowdfunding platforms have made it possible for anyone to invest in a startup, experts recommend keeping the following principles in mind:
If you want to invest in startups through tokenization, then join Brickken now.