Investing in Startups is a really great thing that you can do with your investment portfolio. Investing in startups used to be available only to accredited investors, while on the other hand, Equity Crowdfunding has opened doors for all normal investors.
Equity Crowdfunding benefits both investors as well as companies. Obviously, there is a huge risk associated with Equity Crowdfunding. You can lose all of your money. I started investing in startups in 2017 through Equity Crowdfunding and most of my investments are 0 from my investments made in 2017 and 2018. Specifically for companies that are in the "Test the water" phase .
There are different types of investments in Crowd Funding. SAFE, Convertible Note, Preferred Stocks, and Loan. There is a lot to learn about these different types. There are lots of websites as of now offering different types of Crowd Funding. The good thing about investing in startups through Equity Crowdfunding is that you can start an investment with as little as $50. If the startup is either got listed publicly or sold out for a good price then you will get a great return for each $ invested. But on the other side, most of them end up a failure. But it benefits both investors and the company. Startup companies may be looking at investors as their potential customers, not only investors from Venture Capitalists or Private Equity.
Overall Investments in startups are risky and rewarding investments. It requires lots of research and patience with your investments. Check with all types of equity crowdfunding before making an investment. Investing with less money does not mean a good option rather, do more research on the company and competitors.
Source: News Formal (newsformal.com)