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What is Equity Crowdfunding?

Article on the differences between Equity and rewards based crowdfunding

FundWisdom is an equity crowdfunding information engine. We collect, analyze and aggregate current and historical equity crowdfunding deals from top crowdfunding Websites like AngelList, CrowdFunder, WeFunder, and more. We make your investment decision process more efficient.

This enables investors to simply source crowdfunding deals that meet specific investment criteria and helps startups with finding the right platform to list on. 

Investors are able to increase the likelihood of attractive returns, while entrepreneurs seeking capital are able increase the likelihood of meeting funding targets. 

How do Investors using Funding Portals Make Money?

The draw to early stage investments and innovative projects, companies, and asset types like startups, cryptocurrency, and real estate is the high risk and high reward. Capital appreciation on these offerings are typically much higher than public company equity or stock. Often the return seen or money made is multiples 2, 3 even 100 times what that initial investment was. A higher percentage of the time though companies in their early years do not make it and you lose it all. The period of time to hold the investment is typically much longer than public equities as well. If you are willing to wait and take the risk the rewards can be bountiful. For more detail on return data see our Market Insights section.

What are the regulations that govern who can invest?

In many countries there are laws and restrictions, based upon wealth requirements, to invest in early stage high growth companies. We believe in open access.

In the USA qualifying as an accredited investor requires a high net worth which we detail in our laws rules and regulations page.

Historically the only way to invest in these offerings was to have a connection to the founders, through the "friends and family round." That has recently changed with several regulations like the JOBS Act Title III. The regulated equity crowdfunding sites or platforms bring everyone access, while several portals still cater to the high net worth, accredited investors.

How do you buy shares in a startup before the Initial Public Offering (IPO)?

Due to the level of regulation and legal and accounting challenges with this type of private investment, portals have been built to make the investment purchase and management process much easier.

 

Help and FAQs from Portals

SeedInvest calls their help section Academy Guides

AngelList answers a myriad of questions