Unraveling myths about Equity Crowdfunding from the point of view of the investor (Part 2)
4. Equity Crowdfunding hasn’t given the investors an exit
FALSE. Even though the industry of Equity Crowdfunding only has a little more than 4 years, at Fellow Funders we believe that the exits of the companies that seek investment through collective financing, could reach before the average 7 years of a VC.
Looking at the data, you can appreciate that most of the companies backed by VC don´t end up giving a return over the money of their investors until the seventh year. The fact that Equity Crowdfunding is still in its early years, where most Equity Crowdfunding platforms have less than two years, tells us that it’s still too soon to be able to compare the data on the table. None the less, some investors that use collective investment platforms are holding up to a bright future, especially those that invest in rounds with pre-IPO models.
None the less, it will de undeniable that many projects that get their financing through Equity Crowdfunding will suffer loss, especially during the first years. Still, it’s encouraging to know that an infinity of investment opportunities will be there for possible revenues in the future. For example, in the USA where there are more than 500.000 investors, many of them are reaching out to Equity Crowdfunding platforms to raise their alternative investment wallet. It’s estimated that there are 8 million homes in the country that will qualify to participate in collective crowdfunding. Very promising data, if we exploit the European market.
5. Investing in Equity Crowdfunding platform can be very tedious
TOTALLY FALSE. Right now, and through the most “traditional” way, investing in new companies means a lot of hard work. You have to “kiss many frogs” before finding a good investment opportunity. You select multiple candidate companies, meet its board and promoters, and start your investigation on the projects that caught your eye. Once you find your “prince charming,” you’ll have to start the negotiations of the partner’s pact, for example, getting all the paperwork done, etc.
Equity Crowdfunding platforms take care of this heavy burden when it comes to filtering, valorizing the company, negotiating the partner’s pact and reducing risk in the beginning. At Fellow Funders, a team of professionals has been working the field for more than 3 years, checking more than 100 companies per month, searching for the next big investment opportunity worth millions of euros, searching for the next Google, Apple or Facebook for example.
We love to hear the comments of our investors that enjoy examining new opportunities at FellowFuners.es We’ve done all the previous work, so that investors can simply log in at FellowFunders.es and see the informative videos, check the deck, read the Objective Valorization Report or download the teaser that we develop through our analysis of the project or company.
The team at Fellow Funders have analyzed, investigated, completed the company valorization, and negotiated the partner’s pact with the companies that register on our platform.
We’re on the same team as the investors, and we share the experience of investing with them in innovative and thrilling new projects. There’s an authentic dialogue between our investors and the whole team at Fellow Funders, were together, we create a big family and Fellow Funders community.
6. I can´t build my own alternative investment wallet
FALSE, AGAIN. Not only is it false, but it’s what’s advisable to any investor in order to reduce risk and hope for a good revenue in the future.
Building an alternative investment wallet with participations in several companies of multiple industries, level of maturity and different focus, allow for a horizon of 5 to 10 years, securing a very interesting IRR.
Build your own investment wallet with Fellow Funders, we believe that the investment through Equity Crowdfunding is one of the best ways to diversify. For it, we propose that you invest between 5% to 10% of your estate in an alternative investment wallet.
We’re waiting for you!