It took four years for the Title III of the Jumpstart Our Business Startups Act (JOBS Act) to be officially enforced on May 16, 2016. Investment crowdfunding in the US is heavily regulated as compared to the UK, where regulators have been slightly more lenient which has resulted in Crowdfunding being widely viewed as a success in the UK.
The Congressional “Father” of Title III of the JOBS Act, Rep. Patrick McHenry, introduced the “Fix Crowdfunding Act” into the House of Representatives. Its provisions are focused on Keep reading this post
Investing is not easy – every successful investor has a strategy and rules they follow in order to try to minimize the risks and maximize the profits. Here are some rules to follow, based on the advice from Warren Buffett and Steve Anderson (Baseline Ventures).
- Start early – developing smart investing habits now vs. later in life pays out exponentially in the future because of the “magic” of compounding returns.
- Be willing to be different – “you follow the herd, you’re gonna get hurt”.
- Don’t be afraid to risk – one of the biggest mistakes young investors make is allocating too much of their investments in cash or bonds.
- In you don’t understand it, don’t invest in it – complex deal terms, business model you don’t understand, etc. – avoid it. Keep reading this post
When you are launching a crowdfunding campaign, you have to create a following, attract supporters – and you need to start working on that before the campaign is live. Richard Swart, director of research at the Program for Innovation in Entrepreneurial and Social Finance at the University of California, Berkeley, found that campaigns that successfully raised $100,000 spent at least 200 hours preparing for a crowdfunding effort and an average of 136 hours managing it – all before pledged funds hit the bank. “To reach the funding target, the first 30 percent of funds needs to be committed before the campaign goes live,” Swart says.
Start with writing down who your ideal customer is and who your ideal funder will be. Focus on real data about customer demographics and online behaviour, along with educated guesses about their personal histories, motivations, and potential concerns. Keep reading this post
If you are looking to start investing in private companies, you need to understand what happens after the investment and how to manage your portfolio.
What Happens After You Invest?
Depending on the range of factors such as the performance of the startup, the terms of your investment, the terms of any subsequent financing rounds, and the terms of any liquidity event the are a few possible outcomes of your investment which include: Keep reading this post