Part III: After investing
During the past two weeks, we have been sharing tips that we consider crucial for professional investment in startups or micro-SMEs. However, these tips could also be advantageous for investing in more developed companies. To conclude our trilogy of articles, we will focus on two fundamental aspects: the investment recovery by investors and the management of their portfolio of investees.
Most companies financed through equity crowdfunding are at a less consolidated stage in their growth and scaling process. Such companies are startups and micro-SMEs. These generally have disruptive business models that are just beginning to monetize, in which investing involves a higher risk but the expected returns are superior and commensurate with the risks assumed. However, each project can offer different profitability in the medium/long term, depending on its business model, sector, and the expectations of the management team and the reference shareholders.
There are mainly three fundamental methods to make your investment profitable:
- Divestment or Exit. Investors obtain profits from the company’s total or partial sale to a third party. The final acquirer may be a corporation that wants to generate synergies with its business model, a competitor that wants to scale inorganically, or a large professional investor (fund, venture) that wants to boost the company to leap in its scaling and consolidation process. In this case, if the shareholders’ agreement is well drafted, the retail investors can sell part or all of their shares to the end customer.
- Dividends. Another form of potential return on investment. The percentage of profits the company decides to distribute to its shareholders at the end of each year. These are mature companies with a solid cash-flow generation, and where the growth potential is more limited, known in the financial literature as a “cash cow”.
- Listing on the capital markets. Although it has been the least used formula up to now, an increasing number of companies have included a listing on an organized stock market in their consolidation plan. This process allows investors to generate liquidity through the sale of their shares in the market.
One final observation. In our opinion, the investment process is not over with the fund’s disbursement and the subscription of the corresponding shareholding in the company. The correct and regular monitoring of the investment portfolio is crucial. At Fellow Funders, we believe in creating a strong relationship between companies and investors to create a community of interest to generate synergies and accompany the company in its scaling and consolidation.
As a professional Equity Crowdfunding platform through which to access the alternative investment market, Fellow Funders wants to accompany you as an investor throughout the entire process. Before, during, and after investing. Our ultimate goal is to help you build a diversified alternative investment portfolio where risks are aligned with the investors’ appetite.
Tools to define your alternative investment portfolio
Our platform gives you access to a series of utilities to set up an alternative investment portfolio as an investor:
- Investment tracking. You will have access to track and monitor all your investments on our platform, as well as download the initial documents of the project, partners’ agreement, and capital increase, among others. You will also periodically receive a follow-up report of the company reflecting both quantitative and qualitative aspects.
- Communication channel. There is a private room where you can access the results of the invested companies, dividends paid, balance sheet, or any other relevant information. You will also be able to contact the entrepreneurs, who will use this channel to answer your questions.
- Personalized manager. An assigned personal manager who will inform you of the most attractive investment options available will accompany you as an investor, supporting you in all processes. You will be able to ask all your questions regarding your investees. If you have not invested yet and have doubts, you can contact us through the mailbox inversores@fellowfunders.es; a manager will contact you.
- Training. We have a constantly evolving space based on doubts and queries that our investors submit to us. There we share practical advice for choosing and managing an alternative investment portfolio and discuss all matters of interest related to alternative investment. As long as you have your notifications activated, you will be personally notified if we include any new information.
Fellow Funders provides you with all the tools we believe necessary to have the best possible control of the investments that make up your portfolio and all related aspects. The ultimate goal is to provide you with the same instruments that great professional investors already have.
Remember! The best way to reduce risk exposure is to build diversified portfolios (by business model, activity sector, and time horizon). Likewise, it is advisable to gradually build the portfolio and select the sectors and projects in which to invest.
We help you build a diversified portfolio with a variety of projects and maturity periods. Our mission is to contribute to democratizing alternative investment. Our mission for this purpose is to help you, a potential investor, to invest as the most experienced investors do.
Want to become an alternative investor?
Fellow Funders is the perfect place to start your investment process. Our company offers all the facilities to become an alternative investor and the help of experts that will clarify your doubts during the whole process.
Fellow Funders is the perfect place to start your investment process. Our company offers all the facilities to become an alternative investor and the help of experts that will clarify your doubts during the whole process.
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