Fintech Articles - Fundwisdom.com https://fundwisdom.com/ en Reducing Risk with Equity Investing Portals https://fundwisdom.com/article/brian-thopsey/reducing-risk-equity-investing-portals <span property="schema:name">Reducing Risk with Equity Investing Portals</span> <div property="schema:text" class="field field--name-body field--type-text-with-summary field--label-hidden field__item"><p>Access to invest in alternative assets like high growth startup companies continues to grow giving you the potential for large returns, building wealth. With the potential for life changing returns comes risks. In order to profit from investments in early stage equity and coin offerings, strategies to lower risk and ensure compliance are imperative. Risk of any venture investment comes with a high chance of failure and losing everything. We review firms offering due diligence, diversification, and insurance to help you in your investment process.</p> <p><img src="/sites/fundwisdom.com/files/styles/max_325x325/public/2020-07/nature-water-eyes-pond-45863.jpg" style="float:right;margin:10px;" class="autofloat-odd " /></p> <h2>Innovations and Access</h2> <p>If you are interested in angel investing you are willing to deal with the high risk. You are willing to potentially lose all of what you put in at the chance of getting returns of many multiples of what you put in. We focus investing portals that are currently covering most seed stage startups which are the highest risk due to the business being so young. </p> <p>Changing regulations and innovations in financial technologies are opening access to new forms of investments. <a href="/investors/platforms">Investing portals</a> are offering new forms of access to securities like equity, cryptocurrencies, debt, and more. This has created opportunities to generate wealth that was historically only open to accredited investors. <a href="/crowdfunding-investors/crowdfunding-non-accredited-investors" tabindex="-1">We explain this further in our investor section</a>. <a href="/crowdfunding-investors/crowdfunding-investor-types" tabindex="-1">Accredited investors</a> are those high net-worth investors, who are certified by the Securities and Exchange Commission (SEC) to invest a percentage of their income in exchange for a stake in the company. Equity funding through portals provides an incredible opportunity for investors and startups to exchange equity and capital in a more efficient manner.</p> <p>While investors and entrepreneurs need to be aware of the risks involved in these changes, this form of financing creates the potential for huge rewards. This has the potential to spur economic expansion and job creation. The increase in access to capital for innovative ideas is speeding business life cycles and opening up opportunity for investors willing to take the risk.</p> <h2>Assessing the Risk - Due Diligence</h2> <p><img alt="CrowdCheck" class="autofloat-even autofloat-odd " data-entity-type="" data-entity-uuid="" height="94" src="/sites/all/files/cfund//crowdcheck_logo_200.png" width="200" /></p> <p>A due diligence and disclosure company for online offerings providing transparency and investor protection to platforms, investors and entrepreneurs. Sara Hanks, Founder and CEO of the firm recently shared with us, "We help to make sure the investor has the tools to make an informed investment decision. We thus protect the issue, the investor and the intermediary."</p> <p><a href="http://www.crowdcheck.com/">CrowdCheck</a>, takes the hassle out of the due diligence process, and has partnered with some of the leading online investment platforms such as <a href="https://www.seedinvest.com/">SeedInvest</a> and <a href="https://www.wealthforge.com/">WealthForge</a>. CrowdCheck helps people on both sides of the ledger. For investors, the company provides them with a tool to combat against potential fraud, and presents the due diligence check investors are looking for in a simplified manner. Entrepreneurs seeking funding also benefit from the service vetting potential investors. The company was founded by Sara Hanks where she employs a team of securities attorneys and research analysts.</p> <p>research and due diligence will be used to reduce risk for those investing through the <a href="/investors/equity-funding-platform-costs-fee-structures">current equity funding platforms</a>.</p> <p> </p> <h2 style="clear: both;">Platforms</h2> <p>Investors and entrepreneurs can exchange capital and equity on platforms and for this service, the platform receives compensation either in up front fees or fees structured to the deal itself. Many of these <a href="/investors/platforms">online investment platforms</a> perform due diligence themselves officiating those that list on their sites. This is due in part to regulatory obligations and potential liabilities. The work done to help with the due diligence process on their part can shield them from these risks and help you. In our listings we call out the level of effort and service each platform performs.</p> <h3>For Entrepreneurs</h3> <p>Entrepreneurs must either rely upon services or perform their own due diligence on both the investing portals and individual investors before signing any legal agreements. Bill Southworth, CEO of the renewable energy startup company Elecyr, used EquityNet for one of his earliest funding rounds. He has reported that one of the investors had gone so far as to steal the identity of a genuine angel investor. Once Southworth made this discovery he immediately took down his listing on EquityNet. <a href="http://thefunded.com/" target="_blank">The Funded</a> the "Yelp of Venture Capital" was created to allow portfolio companies to rate their investors.</p> <p> </p> <h3>Determining Price - Valuation</h3> <p>There is increased importance having investments verified by a third-party evaluation service. In fact, a recent survey by <a href="https://blog.propelx.com/unfollow-leader-angel/">Propel(x)</a> found that nearly 95% of angel investors and just about 90% of non-angels point to the importance of third-party expert evaluation services as an important tool in investment decision making. Examples of companies that are leading the way in this area include <a href="http://www.algovalue.com/">AlgoValue</a> and <a href="http://www.valueanalyticsanddesign.com/">Value Analytics &amp; Design</a>.</p> <p><img alt="Algo Value" data-entity-type="" data-entity-uuid="" src="/sites/all/files/cfund//field/image/algovalue_0.jpg" style="margin: 10px 20px; width:480px;" class="autofloat-odd " /></p> <p><a href="http://www.algovalue.com/">AlgoValue</a> provides an online valuation platform and cap table analysis that features indispensable tools. One of them is a 'Term Sheet Analyzer,' which allows users to run a range of 'what if' scenarios before putting pen to paper. The 'Enterprise Valuator' features a comp database of more than 11,000 companies and provides a convenient way to measure a company's value, even those that may be in the pre-revenue stage, and the company's 'Compliance Wizard' could certainly come in handy for complex tax and valuation issues. In case you just want someone else to do the work for you a valuation expert can be consulted. At Fund Wisdom we have had the chance to work with <a href="/crowdfunding-businesses/business-valuation/valuation-software-and-service-providers">third-party valuation expert </a>Value Analytics &amp; Design.</p> <h2>Hedging Against Loss - Insurance</h2> <p><a href="/article/brian-thopsey/insurance-equity-crowdfunding-investments-brought-aig" tabindex="-1"><img alt="" class="autofloat-even autofloat-even " data-entity-type="" data-entity-uuid="" src="/sites/all/files/cfund//styles/200_x200_fit/public/field/image/3372323968_552de442b3_z.jpg" /></a></p> <p>American International Group Inc., better known as AIG, has dipped its toes into the equity crowdfunding market with the introduction of an insurance product aimed to protect investors. The product is known as "<a href="https://www.aig.com/knowledge-and-insights/k-and-i-article-equity-crowdfunding-how-does-insurance-play-a-part" tabindex="-1">Crowdfunding Fidelity</a>,"</p> <p>It was designed to protect individual investors against issuer fraud that could occur via theft of issuer assets by those involved with the issuing company. The product is currently available to platforms in Canada and the UK. Eureeca, a Dubai-based crowdfunding platform that is registered in the UK, has already signed on. Chris Thomas, Eureeca's founder and co-CEO, provided some thoughts on his company's decision, via a <a href="http://www.businesswire.com/news/home/20160524005941/en/AIG-Launches-Equity-Crowdfunding-Insurance-Product-Protect">press release</a> that touted AIG's new product.</p> <p><img alt="AIG Equity Crowdfunding Offering" data-entity-type="file" data-entity-uuid="19f55c53-0542-4e06-8e62-50316d64458e" src="/sites/fundwisdom.com/files/inline-images/ECF-AIG-insurance.JPG" style="width:680px;" class="autofloat-odd " /></p> <p>There is inherent risk in virtually any investment which range from the size of the small and manageable 'growing pains,' all the way to the other end of the spectrum to the range of 'Houston, we have a problem...' Even the most optimistic investors have a sense of wanting to 'hedge their bets.' But do you need equity crowdfunding insurance? One of the world's largest insurers thinks so, and they have introduced a product that's the first of its kind in the burgeoning crowdfunding space.</p> <p>"The new power of the crowd and the desire to democratize investing throughout the world can unleash great partnerships. The success of the ecosystem depends on collaboration between all stakeholders. AIG has demonstrated its commitment to being a valued insurer to this new industry by engaging the crowdfunding space at such an early stage." Thomas said. Lex Baugh, AIG's President of Liability and Financial Lines, had this to say, "As a sector still in its infancy, equity crowdfunding platforms are only as strong as the confidence they instill in their investors. This new product will help provide that confidence and help to support this asset class as it matures," Baugh said.</p> <p>There's a couple of different takeaways on <a href="https://www.aig.com/knowledge-and-insights/k-and-i-article-equity-crowdfunding-how-does-insurance-play-a-part">AIG's issuance of a product specific to the equity crowdfunding</a> space. First, for a financial behemoth of the size of AIG to dip its toes into the water, there's a pretty good chance the space will continue on its upward trajectory. Second, while additional protection for investors is a positive step, will the coverage continue to be necessary as the industry matures and regulations are finalized?</p> <p> </p> <h3>Government Agencies</h3> <p>U.S. Securities and Exchange Commission (SEC)<br /> <a href="https://www.sec.gov/oiea" tabindex="-1" target="_blank">Office of Investor Education and Advocacy</a><br /> 100 F Street, NE, Washington, DC 20549-0213<br /> Telephone: (800) 732-0330</p> <p>Financial Industry Regulatory Authority (FINRA)<br /> <a href="http://www.finra.org/industry/file-tip" tabindex="-1" target="_blank">FINRA Complaints and Tips</a><br /> 9509 Key West Avenue, Rockville, MD 20850<br /> Telephone: (301) 590-6500</p> <p> </p> <h2>Diversification with Funds</h2> <p>We review a <a href="/investors/funds">set of funds that can help reduce risk</a> through diversification.</p> <p><a href="http://thefunded.com/funds/" tabindex="-1" target="_blank">TheFunded.com</a> is a rating system that let entrepreneurs rate their investors. The interface is poor, but the data is robust on the larger funds. It claims to be the "Yelp of Venture Capital" and was created to allow portfolio companies to rate their investors.</p> <h2>Our Take</h2> <p>Online investing via Equity Crowdfunding is an exciting opportunity for both businesses and investors. While investors and entrepreneurs need to be aware of the risks involved in this new market, this form of financing creates the potential for huge rewards. It has and will continue to create opportunities for individuals to participate in a team of passionate and hardworking entrepreneurs. Equity Crowdfunding spurs economic expansion and job creation.</p> <p>Ultimately it is up to you to assess the risk involved. No matter how much time you put into due diligence there is still a likelihood of loss, insurance is not infallible, and diversification can only go so far. While this industry presents great risk the potential rewards for me are worth it. Finding something you are passionate about and getting involved with a team that is looking to disrupt an industry and innovate to build something great can be incredibly rewarding.  </p> </div> <span rel="schema:author"><span lang="" about="/users/brian-thopsey" typeof="schema:Person" property="schema:name" datatype="">Brian Thopsey</span></span> <span property="schema:dateCreated" content="2021-05-03T13:57:13+00:00">Mon, 05/03/2021 - 09:57</span> <div class="field field--name-field-tags field--type-entity-reference field--label-hidden field__items"> <div property="schema:about" class="field__item"><a href="/tags/non-accredited" hreflang="en">Non Accredited</a></div> </div> <div id="comment-section"> <div class="title-line"></div> <div id="comment-container"> <div> </div> </div> <div class="cleared"></div> </div> <div class="field field--name-field-sidebar field--type-list-string field--label-above"> <div class="field__label">Sidebar:</div> <div class="field__item">Rigth</div> </div> Mon, 03 May 2021 13:57:13 +0000 Brian Thopsey 5676 at https://fundwisdom.com The Difference Between Debt & Equity Based Financing https://fundwisdom.com/article/brian-thopsey/difference-between-debt-equity-based-financing <span property="schema:name">The Difference Between Debt &amp; Equity Based Financing</span> <div property="schema:text" class="field field--name-body field--type-text-with-summary field--label-hidden field__item"><p><img alt="" src="/sites/all/files/cfund//debt__1.jpg" style="width:800px" class="autofloat-odd " /></p> <p>When an entrepreneur comes up with an innovative idea that requires financial resources greater than what they have they will <a href="/raise-capital">need to raise capital for their business</a>. Business leaders and founders can use equity, debt, convertible debt, build via blockchain and offer <a href="/investors/crypto">crypto tokens</a>, or any combination of these to raise funds to help with the growth of the business.</p> <p>At Fund Wisdom we review innovative funding and investing options and the changing market dynamics that accompany them. These <a href="/investors/platforms">funding platforms</a> are creating greater transparency and market insight on what businesses and investors are using for funding sources and how successful they are. Depending on the entrepreneur and your vision for the business, certain methods of capital will be more appropriate than others. We step through what others are using to help you assess where to go.</p> <p>Below is a screenshot and link to our dashboard that provides a view into the financing types from our <a href="/about/database">database of equity crowdfunding offerings</a>.</p> <p><a href="/investors/companies/security-type"><img alt="Asset type for companies raising Equity vs Debt" category="" data-entity-type="file" data-entity-uuid="099cf53a-1103-4f6a-9f8c-57324c122e5a" http:="" loans-grants="" navigation-structure="" small-business-loans="" src="/sites/fundwisdom.com/files/inline-images/asset-type-raising.JPG" style="float:right;margin:10px;width:400px;/&gt;&lt;/p&gt;&lt;/p&gt;&#10;&lt;p&gt;&lt;h3&gt;What is Debt?&lt;/h3&gt;&lt;/p&gt;&#10;&lt;p&gt;&lt;p&gt;Debt through bonds or notes can be acquired through loans. Debt requires fixed or monthly payments (including interest) to the investor, and provide a preference for payment in case the business files for bankruptcy. Loans can be difficult to attain or may come with very high-interest rates, as a new business has little to no credit history. In the US a government program called the &lt;a data-cke-saved-href=" www.sba.gov="" class="autofloat-even " /></a></p> <p>The Small Business Administration (SBA) can help in the process to raise capital via equity or securing loans and is a great place to start.</p> <ul> <li><a href="https://track.flexlinkspro.com/g.ashx?foid=24.215932.6036173&amp;trid=1156697.215932&amp;foc=16&amp;fot=9999&amp;fos=5">Supermoney</a> and <a href="https://track.flexlinkspro.com/g.ashx?foid=2.5212066.13727610&amp;trid=1156697.207368&amp;foc=16&amp;fot=9999&amp;fos=5">Kapitus</a> offer an aggregation or list of lenders competing for your business providing lower rates so you can efficiently shop around.</li> <li><a href="https://track.flexlinkspro.com/g.ashx?foid=156074.10988.764489&amp;amp%3Btrid=1156697.214503&amp;amp%3Bfoc=16&amp;amp%3Bfot=9999&amp;amp%3Bfos=5">Fundera offers business lending with PPP loans</a></li> </ul> <p> </p> <h3>What is Equity?</h3> <p>Equity offerings provide business capital with no immediate need to pay back investors. Equity investments are securities that provide a stake in the company. Shareholders are rewarded through the retained earnings of the firm and have a claim on the assets of the corporation after the debt holders.</p> <h3>What is Convertible Debt?</h3> <p>Convertible debt is a loan that can convert into equity. The holder of the debt can convert the notes into a specified number of shares of common stock in the issuing company or cash of equal value. It's a hybrid security with debt and equity-like features.</p> <h3>What is a Cryptocurrency Security Token Offering</h3> <p><iframe allow="accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="" frameborder="0" height="315" src="https://www.youtube.com/embed/oHkspZEokY4" width="560"></iframe></p> <p><meta charset="utf-8" /></p> <p dir="ltr" id="docs-internal-guid-ffb59fe9-7fff-a351-cf22-419855397d42">A Security Token Offering (STO) is a form of initial coin offering (ICO, or initial currency offering). It’s a type of funding using cryptocurrencies in a regulated fashion. In an STO, cryptocurrency is sold in the form of "tokens" or "coins" to investors in exchange for legal tender or other cryptocurrencies such as Bitcoin, Ethereum, etc. The tokens sold are promoted as future functional units of currency and are done so following SEC-mandated rules. An ICO can be a source of capital for startup companies. Traditional paper-backed assets like equity shares or debts in a business present some transaction and liquidity issues. This type of business funding event in the form of a token can address some of these problems.</p> <p dir="ltr"><a href="/platform/coinlist">Coinlist</a> is a platform that specializes in these offerings built from the AngelList team is a great source to find these ICO investment offerings.</p> <h3>How are they different?</h3> <p>Debt investments tend to be less risky than equity investments, but with lower and more consistent returns. Debt financing allows you to retain control of your <a href="/crowfunding-businesses/business-and-market-assessment">business</a>; entrepreneurs do not lose creative or strategic control of their startups. Startups may have to back up a loan with collateral, which means that if the startup defaults, it could lose certain tangible assets. Convertible debt delays the need to <a href="/crowdfunding-businesses/business-valuation">perform a valuation</a> as a startup, but it still provides the investors with potential impressive returns as well as an alignment of incentives.</p> <p>Equity investments involve higher risk, but with higher potential rewards. With equity financing you issue shares of common stock to an investor base and the number of shares offered dictates the investor's ownership percentage. Unlike with debt <a href="/content/equity-based-crowdfunding-platform-costs-and-fee-structures">financing</a>, you do not have to consistently allocate profits to loan repayments. There is no requirement to pay back the investment if the business fails with a loan.</p> <h3>Which one should you use?</h3> <p>Careful analysis of offerings can be performed with data <a href="/investors/analytics">market data insights solutions.</a> These products can be used to help analyze performance on either side of the market, investor or business owner. Equity and debt investing platforms are lowering fees providing better rates online, lower fund management fees and transaction costs. When selecting a path to raise funds consider they type of business you are in, your current and future cash flows, profits, expansionary needs, and the creditworthiness of your founding team.</p> <p>If you are considering debt financing a good place to start is with a <a href="https://track.flexlinkspro.com/a.ashx?foid=1156697.137422288&amp;foc=1&amp;fot=9999&amp;fos=1" rel="nofollow" target="_blank">business credit score</a><img border="0" height="0" src="https://track.flexlinkspro.com/i.ashx?foid=1156697.137422288&amp;fot=9999&amp;foc=1&amp;fos=1" style="opacity: 0;" width="0" class="autofloat-odd " />. <a href="https://track.flexlinkspro.com/g.ashx?foid=24.215932.6036173&amp;trid=1156697.215932&amp;foc=16&amp;fot=9999&amp;fos=5">Supermoney</a> and <a href="https://track.flexlinkspro.com/g.ashx?foid=2.5212066.13727610&amp;trid=1156697.207368&amp;foc=16&amp;fot=9999&amp;fos=5">Kapitus</a> offer up competitive rates<img border="0" height="0" src="https://track.flexlinkspro.com/i.ashx?foid=1156697.136643193&amp;fot=9999&amp;foc=2&amp;fos=1" style="opacity: 0;" width="0" class="autofloat-even " />. We have affiliate relationships with both. If you are considering debt financing and have issues with your personal debt check out these <a href="https://learnvest.com/debt/improving-your-credit">tips by LearnVest. </a>As businesses grow they typically employ a blend of both equity and debt financing to meet their needs when raising money. Which method of raising funds works for you? Share in the comments below.</p> <p style="margin-bottom: 7.5pt; line-height: 18.75pt; background: white;">This is an update to an article originally written in 2014 by Kimberly Dodson. <a href="https://www.flickr.com/photos/52278955@N03/" style="font-size: small; line-height: 20.0063037872314px;">Photo credited: Anna Dziubinska</a></p> </div> <span rel="schema:author"><span lang="" about="/users/brian-thopsey" typeof="schema:Person" property="schema:name" datatype="">Brian Thopsey</span></span> <span property="schema:dateCreated" content="2021-03-31T01:00:49+00:00">Tue, 03/30/2021 - 21:00</span> <div class="field field--name-field-tags field--type-entity-reference field--label-hidden field__items"> <div property="schema:about" class="field__item"><a href="/tags/capital-types" hreflang="en">Capital Types</a>, <a href="/tags/raise-capital" hreflang="en">Raise Capital</a></div> </div> <div id="comment-section"> <div class="title-line"></div> <div id="comment-container"> <div> </div> </div> <div class="cleared"></div> </div> Wed, 31 Mar 2021 01:00:49 +0000 Brian Thopsey 292 at https://fundwisdom.com Find Global Equity Investing Platforms https://fundwisdom.com/article/brian-thopsey/find-global-equity-investing-platforms <span property="schema:name">Find Global Equity Investing Platforms</span> <div property="schema:text" class="field field--name-body field--type-text-with-summary field--label-hidden field__item"><p>Looking to find a list of equity funding portals across the globe? As investing regulations have changed in countries throughout the world, this has opened up access to invest in early stage startup companies, that was previously private. Our goal at Fund Wisdom is to help you source deals by understanding the investing portal market to transact through.<br /> <img alt="" src="/sites/all/files/cfund//science-world-210775_640.jpg" style="margin:10px;" class="autofloat-odd " /><br /> We have observed years of growth in the market, with new funding portals being created regularly in the United States of America. The steady rate of Equity crowdfunding platforms getting built presents a challenge to presenting a comprehensive list. Our focus has been those portals that have targeted US investors so taking a global approach makes that even more challenging. I hope to help you identify the investing portal that is right for you and balance your review of them at a global level. </p> <p> </p> <h2>Americas</h2> <p>At Fund Wisdom our focus is on Americas based funding platforms or portals. We will review each portal as we add them into our database. We look to interview entrepreneurs along with investors to help in this review process. At the time of writing this we have 38 investing platforms reviewed and another 57 that have listed with the US SEC but have not seen enough investment offerings to yet warrant our review.</p> <p><a href="/investors/platforms"><img alt="Equity Investing Portals Reviewed" data-entity-type="file" data-entity-uuid="fca94258-3f08-444f-bccf-b679b92e2a20" src="/sites/fundwisdom.com/files/inline-images/portals-reviewed.JPG" style="margin:10px;width:340px" class="autofloat-even " /></a><a href="/investors/companies/missing-platform/all"><img alt="not yet reviewed portals" data-entity-type="file" data-entity-uuid="49d92830-523c-4a19-a45d-2e4500e04029" src="/sites/fundwisdom.com/files/inline-images/not-yet-reviewed-portals.JPG" style="margin:10px;width:300px" class="autofloat-odd " /></a></p> <p>This represents what I consider to be a fairly fragmented market, which I expect to be consolidated over time. We have already observed several platforms in the US go through M&amp;A activity like Seedinvest being acquired by Circle, Nextseed and Republic, Netcapital and ValueSetters.</p> <p><a href="/investors/platforms/folded"><img alt="Equity Investing platforms folded" data-entity-type="file" data-entity-uuid="ff5e8ef2-2c11-4dcb-82ea-17f3313f3e7a" src="/sites/fundwisdom.com/files/inline-images/folded%20platforms.JPG" style="margin:10px;width:340px;float:right" class="autofloat-even " /></a> Note that several platforms have shut down since we first started collecting data and building reviews in 2014. As of writing 6 we had reviewed <a href="/investors/platforms/folded">ceased operating</a>.</p> <p style="clear:both;">We have reviewed <a href="/article/brian-thopsey/top-real-estate-investing-portals">real estate investing portals</a> and the correlations to the equity startup investing marketplace.</p> <p><a href="/article/brian-thopsey/top-real-estate-investing-portals"><img alt="Real Estate Platforms" data-entity-type="file" data-entity-uuid="2d9b0e93-1499-4c17-9fdc-7d0988bc442c" src="/sites/fundwisdom.com/files/inline-images/real-estate-platforms.JPG" style="margin:10px;width:340px;float:right" class="autofloat-odd " /></a></p> <h4 style="clear:both;">Ratings</h4> <p>Out of the platforms we review we provide ranks based upon performance data and research.</p> <ul> <li>Rating of top 10 platforms<a href="/article/brian-thopsey/top-10-equity-crowdfunding-portals-2019"> 2019</a>  &amp;  <a href="/article/brian-thopsey/2020-equity-crowdfunding-numbers">2020</a></li> <li><a href="/investors/companies">Find and search companies raising money across platforms </a></li> <li>For a wide range with detailed reviews <a href="https://yieldtalk.com/crowdfunding-investment-websites">YieldTalk is another great source</a>.</li> </ul> <h2> </h2> <p><a href="/investors/innovative-venture-reports/university-cambridge"><img src="/sites/fundwisdom.com/files/styles/large/public/Global-alt-finance-Cambridge-2020.JPG" style="width:300px;margin:10px;float:right;" class="autofloat-even " /></a></p> <h2>Global Research</h2> <p>The Judge Business School at the University of Cambridge in the UK produces regular <a href="/investors/innovative-venture-reports/university-cambridge">reports on the alternative financial markets with a global view</a>.  Even though the report is wide ranging from the securities they cover, we regularly reference their equity focused insights. We understand much of the data is self reported by the platforms themselves. While the breadth of securities and process to collect is not fool proof presents a challenge to report on the entire equity funding industry, it is still one of the most comprehensive sources for this analysis.</p> <h2> </h2> <h2>Global Regulations</h2> <p>The regulatory framework is vastly different for each country resulting in varied market dynamics and platform operations by geography. We cover Americas based regulation that govern the platforms like <a href="/about/jobs-act-title-iii">Title III of the JOBS Act and the SEC</a>.</p> <p> </p> <h2>List of Global Platforms</h2> <p>Below the comments is a list of equity crowdfunding portals, platforms, websites, digital properties, and apps from all over the world, outside the US. We do not yet have the ability to go as deep as we would like with each platform and achieve a global perspective so we recommend <a href="https://p2pmarketdata.com/p2p-equity-platforms-of-the-world/">P2P Market Data</a> for a more comprehensive list.</p> </div> <span rel="schema:author"><span lang="" about="/users/brian-thopsey" typeof="schema:Person" property="schema:name" datatype="">Brian Thopsey</span></span> <span property="schema:dateCreated" content="2021-03-20T00:22:29+00:00">Fri, 03/19/2021 - 20:22</span> <div class="field field--name-field-tags field--type-entity-reference field--label-hidden field__items"> <div property="schema:about" class="field__item"><a href="/tags/platforms" hreflang="en">Platforms</a></div> </div> <div id="comment-section"> <div class="title-line"></div> <div id="comment-container"> <div> </div> </div> <div class="cleared"></div> </div> Sat, 20 Mar 2021 00:22:29 +0000 Brian Thopsey 1824 at https://fundwisdom.com Capitalize on Real Estate Investing Platforms https://fundwisdom.com/article/brian-thopsey/capitalize-real-estate-investing-platforms <span property="schema:name">Capitalize on Real Estate Investing Platforms</span> <div property="schema:text" class="field field--name-body field--type-text-with-summary field--label-hidden field__item"><p>This is a 2 part series, <a href="/article/brian-thopsey/top-real-estate-investing-portals">Jump to the 2nd part &gt;</a><br /> Many savvy real estate investors are turning to online real estate platforms. Online portals offer a lucrative alternative to owning a piece of real estate through a plethora of investing options which range from commercial sites to single-family houses and land ownership. Many of these investing options can be lucrative, but they were previously inaccessible to the average investor.</p> <p>Real estate investors can avoid the costs of hiring an agent, working with a broker, and dealing with property management, not to mention the potential hazards of being responsible for physical real estate (i.e. landlord-tenant issues, property damage, and criminal activity).</p> <div style="float:right;width:320px;"> <p><a href="/investors/companies/industry"><img alt="Real Estate Chart on Funding Portals" data-entity-type="file" data-entity-uuid="ac94db53-ceea-41df-ae48-0cf11f2a9d08" src="/sites/fundwisdom.com/files/inline-images/real-estate.JPG" style="width:300px;" class="autofloat-odd " /></a></p> </div> <p>At Fund Wisdom we have focused on <a href="/investors/platforms">funding portals that focus on equity in startup companies,</a> but there is a much larger market of portals that just focus on real estate. We have observed similarities between startup and real estate focused investing portals. Each type of platform looks to aid their investor base in achieving positive returns via innovative offerings. As the startup equity crowdfunding industry has grown over the past several years we've observed a commensurate growth in <a href="/investors/companies/industry/real-estate">offerings for companies that are focused on real estate</a>. In this article we discuss platforms that focus just on real estate to explore some of the overlap and strategies to help you capitalize on these investment opportunities.</p> <h2>Crowdfunding Real Estate Innovation</h2> <div style="float:left;width:320px;"><img src="/sites/fundwisdom.com/files/styles/max_1300x1300/public/2020-03/jorge-vasconez-buYlndcNnjM-unsplash%281%29.jpg" style="float:right;margin:10px;width:300px;" class="autofloat-even " /></div> <p>Real estate crowdfunding has disrupted the property investment landscape by radically increasing levels of access to deals that were once out of reach for the average investor. A comparatively new concept, innovative technology has been applied to the financial and legal aspects of the transaction. Capital raised through platforms can go toward a number of initiatives like acquisitions used to develop or refurbish a real estate asset with the aim of subsequent use. Due to the nature of the crowdfunding mechanism, users can diversify their portfolios by investing in a variety of properties generally through a low minimum investment amount required.</p> <h3>Overall Real Estate Market Size (2020)</h3> <table border="1" bordercolor="#00000a" cellpadding="7" cellspacing="0" width="623"> <colgroup> <col width="193" /> <col width="194" /> <col width="193" /> </colgroup> <tbody> <tr valign="TOP"> <td width="193"> <p style="margin-bottom: 0in">2020 Total Market Value *</p> <p><b>$33.6 T</b></p> </td> <td width="194"> <p style="margin-bottom: 0in">1 Year Change</p> <p><b>$1.1 T (3.4%)</b></p> </td> <td width="193"> <p style="margin-bottom: 0in">10 Year Change</p> <p><b>$11.2 T (51%)</b></p> </td> </tr> </tbody> </table> <p>* Market data above presented by <a href="https://www.zillow.com/research/us-total-housing-value-2019-26369/">Zillow Research in their January 2020 article</a>. At the end of the piece they share their take on value creation: "There are generally two ways in which total housing value can grow: Appreciation among existing homes, and/or additions to the local housing stock itself. Roughly 86%, or $9.7 trillion, of the growth in value of the U.S. housing stock over the past decade can be attributed to the simple, steady appreciation of existing homes over this period. The remainder can be chalked up to builders adding value to the housing stock through newly built homes. In almost every individual market, a similar pattern holds true – the majority of overall housing value growth can be attributed to appreciation." Appreciation is an increase in the value of an asset over time driven by demand, weakening supply, inflation or interest rates and the reason to invest in the asset class.</p> <h3>Crowdfunding Market Size &amp; Growth</h3> <p><img src="/sites/fundwisdom.com/files/styles/max_1300x1300/public/2020-04/EY-Real-estate-CF.JPG" style="float:left;margin:10px;width:300px;" class="autofloat-odd " /></p> <p>According to <a href="https://www.ey.com/Publication/vwLUAssets/Real_Estate_Crowdfunding/$FILE/EY-Real%20Estate%20Crowdfunding-March%202019.pdf">research by Ernest and Young</a>, "The global crowdfunding market is worth $84 billion in 2018 and forecast to reach $ 114 billion by 2021, meaning an expected CAGR (2016-2022) of approximately 17%." They go on to share, "Americas account in 2018 for, approximately, 50% of the global market share, meaning $42 billion, 85% of which is represented by US ($ 33 billion).  "Equity crowdfunding is the fastest-growing segment with a CAGR (2016-2021) of 33.9% in contrast with 10.9% performed by lending crowdfunding." They then state real estate crowdfunding, "is one of the fastest-growing segments for crowdfunding.It guarantees to the investors high returns on investments, in the order of 10%-15% on average. In 2016 this segment amounted for $ 4 bn. By 2021, it will probably reach $9 bn, with a CAGR of 19%."</p> <p><a href="https://www.pwc.com/gx/en/industries/financial-services/assets/pwc-etre-global-outlook-2019.pdf">Competing firm PWC Global put out a report, Emerging Trends in Real Estate</a> stating, “Assets will need to be adapted to meet the needs of the people using them more effectively or converted to entirely new uses. Real estate owners will need to become operational businesses and learn very different skills than they required even five years ago. At the heart of this will be understanding what the person using a building wants and delivering it seamlessly.”</p> <p>According to <a href="https://www.absolutemarketsinsights.com/reports/Real-Estate-Crowdfunding-Market-2019-2027-358">Absolute Markets Insights </a>Industrial buildings, or commercial property, are poised to see an expected CAGR of plus 60 percent during the forecast period, according to a report distributed by .</p> <p>Online real estate portals vary widely in their prospective offerings and reach. But in general, as has been the way across the "net," investors leverage massive amounts of real estate data through online real estate online portals. The information available to potential homeowners and real estate investors includes but isn't limited to:</p> <table border="1" bordercolor="#00000a" cellpadding="7" cellspacing="0"> <colgroup> <col /> <col /> <col /> <col /> </colgroup> <tbody> <tr> <td> <p>Homes for sale</p> </td> <td> <p>Coming soon</p> </td> <td> <p>Buyers agents</p> </td> <td> <p>Rental guides</p> </td> </tr> <tr> <td> <p>Foreclosures</p> </td> <td> <p>New construction</p> </td> <td> <p>Real estate apps</p> </td> <td> <p>Rental listings</p> </td> </tr> <tr> <td> <p>For sale by owner</p> </td> <td> <p>Recent home sales</p> </td> <td> <p>Demographics</p> </td> <td> <p>Homes estimations</p> </td> </tr> <tr> <td> <p>Open house</p> </td> <td> <p>Buyers guides</p> </td> <td> <p>Rental buildings</p> </td> <td> <p>Sellers guide</p> </td> </tr> <tr> <td> <p>Sellers agents</p> </td> <td> <p>Sale by owners</p> </td> <td> <p>Valuations</p> </td> <td> <p>Mortgage lenders</p> </td> </tr> <tr> <td> <p>HELOC lenders</p> </td> <td> <p>Mortgage rates</p> </td> <td> <p>Refinance rates</p> </td> <td> <p>Mortgage calculators</p> </td> </tr> <tr> <td> <p>Amortization calculators</p> </td> <td> <p>Affordability calculator</p> </td> <td> <p>Mortgage learner centers</p> </td> <td> <p>Lender resource centers</p> </td> </tr> <tr> <td> <p>Property managers</p> </td> <td> <p>Real estate agents</p> </td> <td> <p>Home inspectors</p> </td> <td> <p>Sales representatives</p> </td> </tr> </tbody> </table> <p>Real estate equity crowdfunding provides an attractive asset class for diversification. They provide investors with a unique opportunity to invest in a specific area and property type.</p> <h2>Structure</h2> <p>Pooled investments via cash from stakeholders are earned through the platform’s ability to stimulate investor interest.</p> <p><strong>Equity investments</strong> are typically longer-term, offering a higher risk/reward profile than debt. They give investors (stakeholders) an equity stake in the commercial or residential property. Dividends generally consist of rental income from the property where the investor will receive revenue following the sale of the property.</p> <p>At Fund Wisdom we focus on angel or venture capital equity investing, where the investor seeks a return based on an increase in valuation of the business. This asset type typically contains an even higher risk and reward profile than property.</p> <p><strong>Debt investments</strong> allow the investor to become a lender for the property. Investors receive a fixed rate of return based on the interest rate of the owner’s mortgage loan, as well as the amount invested. Payments or dividends are delivered on a monthly or quarterly basis and investors maintain priority during payout. It's also worth noting that investors don’t own a proportional share of any property.  Profits are realized in one of two ways: An increase in cost is achieved and paid at the time of sale; or through collection of regular interest payments from debt issued to borrowers through a loan instrument.</p> <p>Investors should always perform their due diligence assessments. Leveraging an evaluation process is a critical step in managing risk effectively. A general criterion for evaluation can include but is not limited to the following; the platform:</p> <ul> <li>Does it have a robust financial position and available capital?</li> <li>Do you have a strategy for insolvency, recouping losses, and managing risk?</li> <li>What are the associated fees (opportunity cost)?</li> <li>Is there an ongoing management fee?</li> <li>Is the shareholder paying a percentage based on yields or total portfolio size?</li> <li>What is the developer’s business plan?</li> <li>What are the expected cash flows, expenditures and projected returns?</li> <li>What is the loan-to-value before repairs and after repairs?</li> <li>Are investors in a first-lien position or second?</li> </ul> <h2>Who</h2> <p>Who can participate in these offerings? Your eligibility for certain offerings is defined by the Securities and Exchange Commission (SEC). They make the rules that govern what you can invest in with categorization of <a href="/about/jobs-act-title-iii">accredited investor and not accredited</a>. Keep an eye on which class of investor the platform is targeting. Each real estate, debt, or other securities may be registered with the SEC and exemptions may be filed. Brew Johnson, the CEO of PeerStreet, wrote a Forbes <a href="https://www.forbes.com/sites/forbesrealestatecouncil/2019/08/13/its-time-for-regulators-to-expand-opportunities-for-smaller-investors/#185644124a35">article</a>. He favors allowing non-accredited investors to invest in secured real estate debt.</p> <h2>Where to Invest</h2> <p>In the second part of this article series we cover <a href="/article/brian-thopsey/top-real-estate-investing-portals">top platforms to place a real estate investment</a>.</p> </div> <span rel="schema:author"><span lang="" about="/users/brian-thopsey" typeof="schema:Person" property="schema:name" datatype="">Brian Thopsey</span></span> <span property="schema:dateCreated" content="2021-03-04T01:39:14+00:00">Wed, 03/03/2021 - 20:39</span> <div class="field field--name-field-tags field--type-entity-reference field--label-hidden field__items"> <div property="schema:about" class="field__item"><a href="/tags/real-estate" hreflang="en">Real Estate</a>, <a href="/tags/platforms" hreflang="en">Platforms</a></div> </div> <div id="comment-section"> <div class="title-line"></div> <div id="comment-container"> <div> </div> </div> <div class="cleared"></div> </div> Thu, 04 Mar 2021 01:39:14 +0000 Brian Thopsey 9691 at https://fundwisdom.com How Crypto-Positive Legislation Could Change the Way Investors Make Decisions https://fundwisdom.com/article/brian-thopsey/how-crypto-positive-legislation-could-change-way-investors-make-decisions <span property="schema:name">How Crypto-Positive Legislation Could Change the Way Investors Make Decisions</span> <div property="schema:text" class="field field--name-body field--type-text-with-summary field--label-hidden field__item"><div style="width:420px;float:right;"><img alt="Capital" data-entity-type="file" data-entity-uuid="c85632ff-111d-4441-91c0-67e5543d1101" src="/sites/fundwisdom.com/files/inline-images/pexels-pixabay-62318.jpg" style="width:400px;margin:10px;" class="autofloat-odd " /><br /> Photo by <a href="https://www.pexels.com/@pixabay?utm_content=attributionCopyText&amp;utm_medium=referral&amp;utm_source=pexels">Pixabay</a></div> <p>I would argue cryptocurrency has reached the point of becoming mainstream. As the uses and impacts to daily life continue to grow, regulators are finally catching up, and more crypto-positive legislation is helping to change the way retail and institutional investors view cryptocurrency.</p> <p>Despite outliers such as India, most governments are accepting that cryptocurrency is here to stay and have been doing the work to build legislation accordingly. This framework is helping to provide investor confidence with many beginning to approach cryptocurrency differently. However, the <a href="https://commodity.com/cryptocurrency/">crypto ecosystem</a> is growing rapidly and there are concerns that it is outstripping governments' abilities to understand it and to approach regulation in a just way.</p> <h2>Is Crypto a Currency, Security, or a Commodity?</h2> <p>In the US, one of the big questions surrounding cryptocurrency is its status. Legislators have differing views on how exactly cryptocurrency should be treated. The importance of this, is that it affects the outcome of the investment as the application applies to tax implications.</p> <p>The main argument for the moment rests on whether they are securities or commodities. The challenge for regulators is that cryptocurrencies are highly diverse, and this means one-size-fits-all legislation is unlikely to be effective.</p> <h3>Bitcoin and Ether vs. XRP</h3> <p>Take the Securities and Exchange Commision (SEC), for example. While they have stated that they do not view Bitcoin (BTC) or Ethereum (ETH) as a security, they have recently begun a <a href="https://www.sec.gov/news/press-release/2020-338">high-profile investigation into Ripple (XRP)</a>.</p> <p>The SEC contends that XRP is an unregistered security.</p> <ul> <li> <p>The SEC views XRP differently than Bitcoin and Ether because the latter two digital assets are not produced or controlled by a single individual or entity.</p> </li> <li> <p>By contrast, the SEC contends that Ripple Labs, Inc., a private company, “<a href="https://www.sec.gov/litigation/complaints/2020/comp-pr2020-338.pdf">initiated a large scale distribution</a>” of over 14 billion units of XRP.</p> </li> </ul> <h3>Futures Trading</h3> <p>Bitcoin and Ether have benefited from the SEC not viewing them as securities. For example, the Commodity Futures Trading Commission (CFTC) has decided that Ether, the token for Ethereum, should be <a href="https://finance.yahoo.com/news/cftc-says-cryptocurrency-ether-is-a-commodity-and-is-open-to-ether-derivatives-133455545.html">considered a commodity</a>. The CFTC has made a similar claim on jurisdiction over Bitcoin.</p> <p>Now both <a href="https://www.cmegroup.com/trading/ether-futures.html">Ether futures</a> and <a href="https://www.cmegroup.com/trading/equity-index/us-index/bitcoin.html">Bitcoin futures</a> are traded as cash-settled derivatives on the Chicago Mercantile Exchange (CME), which is regulated by the CFTC. Investors also have a choice of trading options on these futures.</p> <p>The opportunity to trade cash-settled crypto futures on a platform regulated by the CFTC is attracting institutional investors, like billionaire Paul Tudor Jones. In 2020 Jones stated he was allocating 1%-2% of his fund to Bitcoin futures traded on the CME.</p> <h2>Why Does the Legal Status of Crypto Matter?</h2> <p>The legal classification of cryptocurrency is important because it will influence adoption and use, including among institutional investors. For example, if a cryptocurrency is considered a security, as Ripple is, this means it must comply with strict SEC regulations designed to protect investors. On the other hand, if a cryptocurrency is considered a commodity then it is an asset to be traded. This gives it a lot more freedom in regulatory terms and opens the door for futures markets, which can add more trading options.</p> <p>The final reason that status matters is stability. As the cryptocurrency markets make inroads in being approved by regulators, they continue to attract increasing interest from <a href="https://www.fidelitydigitalassets.com/bin-public/060_www_fidelity_com/documents/FDAS/institutional-investors-digital-asset-survey.pdf">institutional investors</a>, particularly in Europe. For example, Microstrategy was able to grow its stock price from just $125 at the beginning of 2020, to <a href="https://financial-news-now.com/why-bitcoin-btc-is-becoming-an-institutional-investors-game-and-how-you-can-benefit/">more than $1,000</a> in February 2021 via Bitcoin investments. They have since been followed by bigger names, including that of Tesla’s Elon Musk.</p> <h2>Regulations Vary Widely, By Country</h2> <p>While the US appears to be embracing cryptocurrency, other nations are less positive. India has taken a hard stance against cryptocurrency. Its Government has made another attempt to ban cryptocurrency outright, citing money laundering concerns. The move is <a href="https://www.forbesindia.com/article/take-one-big-story-of-the-day/dont-ban-bitcoin-its-good-for-the-economy/66335/1">deeply unpopular</a> and threatens to damage India’s small yet thriving crypto industry.</p> <p>Other countries, including China and Nigeria, have made attempts to curtail crypto trading. But Their efforts haven't worked well. P2P exchanges simply send the crypto trade underground, and governments lose access to capital they could have otherwise taxed.</p> <p>Another area of contention is the downstream crypto derivatives market that targets retail consumers. This market includes instruments like contracts-for-difference (CFDs) that reflect the movement of crypto prices. While this type of trading is popular, the UK’s Financial Conduct Authority (FCA) recently banned <a href="https://www.fca.org.uk/news/press-releases/fca-bans-sale-crypto-derivatives-retail-consumers">the sale</a> of such derivatives citing among their concerns the difficulty that retail consumers may have in understanding the crypto markets and the potential for significant financial losses.</p> <h2>Legislation May Become Irrelevant Anyway</h2> <p>Decentralized cryptocurrencies, particularly the recent slew of DeFi apps, appear to be thriving regardless of the prevailing attitude to cryptocurrency. They are not held to the same Know Your Customer (KYC) standards as centralized exchanges and this significantly lowers the barrier to entry.</p> <p>For example, many people in Africa and South America have turned to cryptocurrency. In fact, Africa is one of the few places where cryptocurrency is actively <a href="https://www.dw.com/en/africas-quiet-cryptocurrency-revolution/a-55199637">used as a currency</a>.</p> <p>These developments represent a significant change from how cryptocurrency has operated in the past. Rather than a series of speculative assets, or small idealistic projects, a crypto community separate from government legislation is beginning to be built. This could pose an opportunity for significant growth, but it may also render government legislation impotent in the process.</p> <p>We suggest you work with a legal professional. We have <a href="/investors/services/top-legal-tax-equity-crowdfunding">identified a few that specialize in this budding industry</a>, but feel free to suggest others you have had positive experiences with in the comments below.</p> <p>This article was written in collaboration with the team at Commodities.com.</p> </div> <span rel="schema:author"><span lang="" about="/users/brian-thopsey" typeof="schema:Person" property="schema:name" datatype="">Brian Thopsey</span></span> <span property="schema:dateCreated" content="2021-02-25T00:15:05+00:00">Wed, 02/24/2021 - 19:15</span> <div class="field field--name-field-tags field--type-entity-reference field--label-hidden field__items"> <div property="schema:about" class="field__item"><a href="/tags/blockchain-crypto" hreflang="en">Blockchain / Crypto</a></div> </div> <div id="comment-section"> <div class="title-line"></div> <div id="comment-container"> <div> </div> </div> <div class="cleared"></div> </div> Thu, 25 Feb 2021 00:15:05 +0000 Brian Thopsey 26573 at https://fundwisdom.com https://fundwisdom.com/article/brian-thopsey/how-crypto-positive-legislation-could-change-way-investors-make-decisions#comments https://fundwisdom.com/article/brian-thopsey/how-crypto-positive-legislation-could-change-way-investors-make-decisions#comments Find New Blockchain or Cryptocurrency Investments https://fundwisdom.com/article/brian-thopsey/find-new-blockchain-or-cryptocurrency-investments <span property="schema:name">Find New Blockchain or Cryptocurrency Investments</span> <div property="schema:text" class="field field--name-body field--type-text-with-summary field--label-hidden field__item"><div style="float:right;margin:10px;width:430px;"><img alt="Blockchain Technology" data-entity-type="file" data-entity-uuid="900ec137-1a91-41cb-9ee1-14889f5aacae" src="/sites/fundwisdom.com/files/inline-images/pexels-aleksandar-pasaric-2603464.jpg" style="width:400px;margin:10px;" class="autofloat-odd " />Thanks to Photo by <a href="https://www.pexels.com/@apasaric?utm_content=attributionCopyText&amp;utm_medium=referral&amp;utm_source=pexels">Aleksandar Pasaric </a></div> <p>Interested in finding new cryptocurrency offerings before the masses have invested? At Fund Wisdom we focus on innovative <a href="/investors/companies">investment offerings</a> and <a href="/investors/platforms">portals</a> that help with the sourcing process. We have observed many initial coin offerings and secure token offerings with the number of cryptocurrencies continuing to grow. As the blockchain technology these currencies are built upon continue to be developed and pop up around the world, finding the right projects to focus on becomes more challenging. These financial innovations are having material impact on the US economy and globally. As interest grows in these offerings many investors look to get a piece of the action. Sure, buying Bitcoin on a platform like Coinbase or Circle is a start, but what about teams building newer blockchain technology? In this article we review new <a href="/article/brian-thopsey/top-funds-blockchain-technology-and-cryptocurrencies">blockchain offerings and funds </a>and how to access them.</p> <h2>Initial Coin Offerings</h2> <p>If you don't have an understanding of blockchain technology or cryptocurrency check out <a href="https://blockgeeks.com/guides/what-is-blockchain-technology/">BlockGeek</a>. The most common form of data stored on a blockchain are ledgers for transactions, as explained by Investopedia with their <a href="https://www.investopedia.com/terms/b/blockchain.asp">guide to Blockchain</a>. The  decentralized approach ensures that no single person has control, distributing it amongst the participants and creating a unique approach to ownership.</p> <p>An initial coin offering (ICO) is a path for a group of people, or company, to gain funding. There are some similarities to an initial public offering for large corporations. According to Harvard Business Review ‘blockchain startups <a href="https://hbr.org/2018/11/the-hidden-costs-of-initial-coin-offerings">raised over $5 billion in 2017 through ICOs</a> and over $12 billion through the first three quarters of 2018. Several itererations of this fundraising process have been built out, from Secure Token Offerings (STO) and Initial Exchange Offering (IEO). IEOs are<a href="https://cryptoadventure.org/latest-trends-of-funding-cryptocurrency-and-blockchain-projects/"> very similar to an ICO in almost every way</a>, the major difference being investors who can participate in the sale are limited to users on the associated exchange.</p> <h2>New Cryptocurrency or Startup Equity?</h2> <p>When it comes to your investment strategy and which route to opt for, an analysis of your risk appetite, the market conditions and how long you intend to hold onto your investments for, should all be taken into account with a registered investment advisor. Finding a growth company at a low market price with strong long term potential can be viewed in a similar fashion to identifying an undervalued coin with long term potential, each with the ability to bring a healthy return on investment.</p> <p>When comparing the two, it’s important to distinguish a few key differences. First up, volatility. Any crypto investor is aware of the sudden spikes and drops a cryptocurrency can experience within a matter of minutes. What’s more, in the stock market the SEC provides assurances to investors that they should have access to a fair bid and offer price across exchanges they regulate. That’s not the case for crypto, where investors have to hunt for the best bid themselves.</p> <p>Whether a company is raising money through coin offerings or equity, this capital can provide  strong network effects to enable first mover advantages. and generating publicity in order to gain some feedback on early stage products. These investments all come with inherent risk, not due to poor execution but simply the fact that startup failure is a natural part of the economy. Cryptocurrencies offer liquidity makes it easy to buy and sell, something certain equities, particularly startup investing through venture capital might not be able to provide at all times.</p> <h2>The Figures</h2> <p>Seemingly more banks and institutions are backing cryptocurrencies, despite it’s notoriously volatile nature. A few key studies to point out found that <a href="https://www2.deloitte.com/content/dam/Deloitte/se/Documents/risk/DI_2019-global-blockchain-survey.pdf">74% of tech-savvy executive teams surveyed by Deloitte said they believe there’s huge business potential in blockchain technology</a>, suggesting the technology is gaining traction amongst key company authorities. What’s more, a study by Reuters stated that Blockchain could <a href="https://www.reuters.com/article/us-banks-blockchain-accenture-idUSKBN1511OU">help banks save up to $12 billion per year</a>. Not only this, but so called financial market experts like Bill Miller who served as chairman of Legg Capital Management spoke of crypto currencies in a positive light, claiming that the currency will only get stronger. Clearly, blockchain and cryptocurrency is going to become a large part of the global economy, it’s merely a matter of when.</p> <h2>Top Blockchain Funds</h2> <p>As of writing this, there are no Bitcoin mutual funds investors can place their money in. Although a number of securities offer investors exposure to cryptocurrency and blockchain technology. There are dozens of <a href="/article/brian-thopsey/top-funds-blockchain-technology-and-cryptocurrencies">Blockchain Funds and ETFs</a> available for investors. Many of the ETFs invest in publicly traded shares of companies that have involvement in blockchain technology.</p> <p>Tokenized Blockchain Funds are another example of funds investors can invest through for exposure to blockchain. This is a new type of investment vehicle requiring the investor to purchase a token, for example the C20 token, which provides a stake in the crypto20 tokenized index fund, a tracker for 20 digital assets.</p> <p>Crypto hedge funds are a rapidly emerging investment vehicle providing investors hands off exposure to blockchain. Although the minimum investment is often quite large, meaning typically only high net worth individuals have access to this form of investment opportunity. But, for the investor with a few spare bucks and the connections in a big crypto hedge fund, the ability to access the expertise of crypto portfolio managers can be very appealing.</p> <h2>Securing you Crypto</h2> <p>A method of increasing the security of the storage of your crypto is a hardware wallet. Similar in concept to a physical wallet for cash, several companies like produce these connected devices. There are many wallets on the market currently, here at Fundwisdom we opted for <a href="https://shop.ledger.com/pages/ledger-nano-x?r=10988c46bbfd" tabindex="-1">a Ledger</a> and <a href="/article/brian-thopsey/crypto-hardware-wallet-ledger-nano-x-review">wrote a review of our experience and relationship.</a> The process is simple, you buy the hardware set up the account, access your wallet and place your cryptocurrency in for safe keeping.</p> <h2>What is Next?</h2> <p>We hope to empower you to create your own portfolio or fund, conducting your own independent research. Share your thoughts on new crypto offerings and stories of leveraging hardware wallets below. </p> <p>This article is written in collaboration with <a href="/users/callum" tabindex="-1">Callum Lepley.</a></p> </div> <span rel="schema:author"><span lang="" about="/users/brian-thopsey" typeof="schema:Person" property="schema:name" datatype="">Brian Thopsey</span></span> <span property="schema:dateCreated" content="2021-02-18T01:10:33+00:00">Wed, 02/17/2021 - 20:10</span> <div class="field field--name-field-tags field--type-entity-reference field--label-hidden field__items"> <div property="schema:about" class="field__item"><a href="/tags/blockchain-crypto" hreflang="en">Blockchain / Crypto</a></div> </div> <div id="comment-section"> <div class="title-line"></div> <div id="comment-container"> <div> </div> </div> <div class="cleared"></div> </div> Thu, 18 Feb 2021 01:10:33 +0000 Brian Thopsey 26572 at https://fundwisdom.com https://fundwisdom.com/article/brian-thopsey/find-new-blockchain-or-cryptocurrency-investments#comments https://fundwisdom.com/article/brian-thopsey/find-new-blockchain-or-cryptocurrency-investments#comments 2020 Equity Crowdfunding by the Numbers https://fundwisdom.com/article/brian-thopsey/2020-equity-crowdfunding-numbers <span property="schema:name">2020 Equity Crowdfunding by the Numbers</span> <div property="schema:text" class="field field--name-body field--type-text-with-summary field--label-hidden field__item"><p>Are you looking to select the right equity funding platform to raise money for your idea or business, or are you looking to invest? I will run through the data and insights on the overall market to help you maximize your ability to secure funding or find the right investment portal for you. Many of us believed we would see explosive growth in equity crowdfunding. At Fund Wisdom our thesis was built on the belief that there was pent up demand for access to high yielding startup investments. I break down the market, how the industry has re-define early-stage startup investing and funding. and where future opportunity lies.</p> <p><a href="https://www.equitytrack.co/proposal-to-raise-reg-cf-cap/">Many had proposed raising</a> the cap the SEC placed on businesses raising money through regulation crowdfunding to above the <a href="https://www.sec.gov/smallbusiness/exemptofferings/regcrowdfunding">maximum of $1,070,000</a> and the call has been answered. <a href="https://www.sec.gov/news/press-release/2020-55">The SEC Proposed Rule Changes to Harmonize, Simplify and Improve the Exempt Offering Framework</a> across each of the major regulated categories with regulation CF to $5 million, A to $22.5 million, Reg D 504 to $10 million.</p> <div style="float:left;margin:20px;width:400px;"><img src="/sites/fundwisdom.com/files/styles/max_1300x1300/public/2020-04/jeff-tumale-5sYQ1uD4pHU-unsplash.jpg" style="width:370px;" class="autofloat-odd " /><br /> <span style="font-size:9pt;">Photo by <a href="https://unsplash.com/@jeff_tumale?utm_source=unsplash&amp;utm_medium=referral&amp;utm_content=creditCopyText">Jeff Tumale</a> on <a href="https://unsplash.com/s/photos/men-in-suit?utm_source=unsplash&amp;utm_medium=referral&amp;utm_content=creditCopyText">Unsplash</a></span></div> <p> </p> <div class="_1l8RX _1ByhS"> </div> <h2>Defining the Equity Crowdfunding Market</h2> <p>If you’re starting a business and need money upfront the traditional way to do this was to go to a bank, venture capital firms, or use your own money. Websites and digital platforms help facilitate the transactions now. Equity Crowdfunding in the US can be separated into two major types accredited and non-accredited.</p> <p>Non-accredited is also known as Regulated Equity Crowdfunding, campaigns that were launched under new regulations like <a about="" href="/href%3D" jobs-act-title-iii="">Title III of the Jobs Act (aka Reg CF)</a>. Historically only <a about="" href="/href%3D" jobs-act-title-iii="">accredited investors, or wealthy people defined by the SEC</a> were able to invest in businesses offering shares at an early stage, outside of friends and family. This limited opportunities for those who were not wealthy enough to qualify. </p> <p> </p> <h2>Market Size</h2> <p><a href="https://pitchbook.com/media/press-releases/us-venture-capital-investment-reached-1309-billion-in-2018-surpassing-dot-com-era" target="_blank">According to research from PitchBook</a>, in 2018 US Venture Capital reached $130.9 billion whereas non-accredited Regulated Equity Crowdfunding is only 0.08 percent of that at $109.3 million according to <a href="https://venturebeat.com/2019/01/30/regulation-crowdfunding-performed-solidly-in-2018-heres-the-data/" target="_blank">CrowdFund Capital Advisors via VentureBeat</a>. The accredited portal market is much more challenging to put a broad number to due to the listings no longer being publicly accessible they were back in 2014. <a afqjcnhvqakue9lxmiv9vdkvhhbrinvcva="">The University of Cambridge’s Center for Alternative Finance</a> publishes a report stating about 0.3 percent of VC was funded through portals in <a href="/href%3D" innovative-venture-reports="" investors="" university-cambridge="">2017 at $260.9 million</a>. They do not break out the two types via accredited and non, and rely upon self reporting by the platforms.       </p> <p>At Fund Wisdom we have been working on <a href="/href%3D" investment-activity="" tags="">Research</a> on investment insights across accredited and non accredited data, we have used this to build our <a article="" brian-thopsey="" href="/href%3D" top-10-equity-crowdfunding-portals-2019="">rank for the top 10 portals</a>, and <a equity-funding-dashboard="" href="/href%3D" investors="" platforms="">our Dashboard</a> in its early stages. We have been focused on the Americas thus far but have compiled a list of <a article="" brian-thopsey="" global-equity-crowdfunding-platforms="" href="/href%3D">platforms across the globe</a>. </p> <h3>Regulated Non Accredited Equity Funding</h3> <p><img src="/sites/fundwisdom.com/files/styles/max_650x650/public/2020-04/RegCF%20OfferingsperYear.png" style="width:360px;" class="autofloat-even " /> <img src="/sites/fundwisdom.com/files/styles/max_650x650/public/2020-04/RegCFDollarsperyear.png" style="width:360px;" class="autofloat-odd " /></p> <p><a href="http://crowdfundcapitaladvisors.com/regulation-crowdfunding-performed-solidly-in-2018-heres-the-data/" target="_blank">CrowdFund Capital Advisors</a> have been publishing the most comprehensive reviews I have found of the Americas regulated market, with the <a href="https://venturebeat.com/2019/01/30/regulation-crowdfunding-performed-solidly-in-2018-heres-the-data/" target="_blank">VentureBeat</a> article being a great example. </p> <p> </p> <p>We have observed some discrepancies in every report we have found for the same time frames. For instance StartEngine regularly provides reviews of the industry and their performance. In this case <a href="https://www.startengine.com/blog/equity-crowdfunding-2018-review/" target="_blank">2018 data</a> listed was at $75.8 million total differs from CrowdCapital team of $109 mil. This is likely due to the quality of data coming from the SEC posing challenges. We showcase a breakdown of a few sources we have found.</p> <p><img src="/sites/fundwisdom.com/files/styles/max_650x650/public/2020-04/FundWisdom%20Custom%20Table%20RCF%20Data.png" style="width:700px;" class="autofloat-even " /></p> <p>The US SEC has added Equity Funding Portal filings to the EDGAR online filing database. The SEC site now has section built for equity funding portals and different Regulation funding offerings like D and A+.</p> <p style="line-height:1.38"> </p> <h3>Accredited Investor Portals</h3> <p><img src="/sites/all/files/cfund//platforms_by_market_share.jpg" style="width:700px;" class="autofloat-odd " /></p> <p>Most Accredited portals do not provide public listings as they once did so gathering this data has become very challenging. We built a<a href="/article/brian-thopsey/online-venture-investing-data-and-analytics-2014-2015"> detailed report of data back in 2015</a> that provided a detailed view of the how the industry began prior to non-accredited investing being possible. Around the time frame we released the report the accredited focused platforms began moving their equity listings, that had been public, behind a login. The login requires accredited investor verification. <a href="http://tydanco.com/2011/08/08/the-big-four-benefits-of-angellist-for-investors/">Ty Danco' wrote a piece on the Benefits to using AngelList.</a></p> <p> </p> <h3>Who is Achieving Success </h3> <p>Sherwood Neiss of CrowdCapital Advisors states “Unlike venture capital, where less than 6.5 percent of startups successfully raise funds, the success rate in Regulation Crowdfunding hovers around an impressive 60 percent.” </p> <h4>Industries </h4> <p>Some sectors have been greater affected by these financial innovations. The real estate and restaurant industries have seen some great success raising capital. CrowdCapital Advisors team <a href="http://crowdfundcapitaladvisors.com/industry-reports/">put a great report on the restaurants</a>.</p> <h2>Entrepreneurs Raise Capital</h2> <p>At Fund Wisdom we have focused our efforts on the investor side of the equity funding portal industry while <a href="https://www.crowdcrux.com/">Crowdcrux </a>has focused on helping entrepreneurs raise funds. Crowdrux produces powerful material to those looking for funding across the various types of crowdfunding like rewards based sites like Kickstarter, not just equity. The total number of people raising money via equity portals is dwarfed by the other categories, but it unlocks the greatest potential for both sides of the market, the funder and the inventor. Below are a few resources to help in this process:</p> <ul> <li>Kendall Alemerico's<a href="http://www.entrepreneur.com/article/237678"> 10 tips for Startup Equity Investing via Entrepreneur</a></li> <li>Master<a href="https://www.equitycrowdfundingmasterclass.com/">Class For raising funds for Filmmakers </a></li> </ul> <h2>Conclusion</h2> <p>There is growth in the overall US Equity Crowdfunding market for entrepreneurs to gain funding in areas that were otherwise not possible. The recent adjustment of raising the cap for Reg CF to $5 million from $1 million will definitely help with that. Opportunities will increase as regulation continues to open up and solutions continue to be developed to improve the fund raising process across early stage stage investment offerings. Let us know what you think in the comments below.</p> </div> <span rel="schema:author"><span lang="" about="/users/brian-thopsey" typeof="schema:Person" property="schema:name" datatype="">Brian Thopsey</span></span> <span property="schema:dateCreated" content="2021-01-09T10:19:03+00:00">Sat, 01/09/2021 - 05:19</span> <div class="field field--name-field-tags field--type-entity-reference field--label-hidden field__items"> <div property="schema:about" class="field__item"><a href="/tags/analytics" hreflang="en">Analytics</a>, <a href="/tags/investment-activity" hreflang="en">Investment Activity</a></div> </div> <div id="comment-section"> <div class="title-line"></div> <div id="comment-container"> <div> </div> </div> <div class="cleared"></div> </div> Sat, 09 Jan 2021 10:19:03 +0000 Brian Thopsey 9693 at https://fundwisdom.com https://fundwisdom.com/article/brian-thopsey/2020-equity-crowdfunding-numbers#comments https://fundwisdom.com/article/brian-thopsey/2020-equity-crowdfunding-numbers#comments The Top 10 Equity Crowdfunding Portals 2020 https://fundwisdom.com/article/brian-thopsey/top-10-equity-crowdfunding-portals-2020 <span property="schema:name">The Top 10 Equity Crowdfunding Portals 2020</span> <div property="schema:text" class="field field--name-body field--type-text-with-summary field--label-hidden field__item"><p>This is a yearly update from our <a href="/article/brian-thopsey/top-10-equity-crowdfunding-portals-2019">last review in 2019 which covers how we build our ranking</a>. We break up our list to Accredited focused top 10 and regulation crowdfunding, non accredited focused portals.</p> <h3>Non Accredited Top 10</h3> <p><a href="/investors/platforms/equity-funding-dashboard"><img alt="2020 top 10 " data-entity-type="file" data-entity-uuid="15d9b3e2-501f-4e02-ad9d-ba46b3f52468" src="/sites/fundwisdom.com/files/inline-images/2020%20performance.JPG" style="width:300px;" class="autofloat-odd " /></a><img alt="Top 10 Non Accredited" data-entity-type="file" data-entity-uuid="553be76a-ec62-4f39-9dcb-e4d97d2ca420" src="/sites/fundwisdom.com/files/inline-images/top-10-nonaccredited.JPG" style="width:300px;" class="autofloat-even " /></p> <h3>Accredited Top 10</h3> <p>We had previously been able to attain data on funding volumes, but that has changed years ago now, so our ability to properly rank is not an option. We have a list of investing portals and look for feedback on how to best take the factors we measure.</p> <p><img alt="Accredited Top 10" data-entity-type="file" data-entity-uuid="a1c40846-2902-4ed6-847d-81fc11e5347d" src="/sites/fundwisdom.com/files/inline-images/accredited%20top%2010.JPG" style="width:300px;" class="autofloat-odd " /></p> <p> </p> <h3>Regulation Changes Helps Grow Market for 2020</h3> <ul> <li>Regulation CrowdFunding (Reg CF) maximum amount a company can raise was increased from $1M per year to $5M for startups.</li> <li>Compliance review of the business can now be completed just before closing of the funding round, which will reduce up front time for entrepreneurs. </li> <li>Becoming an <a href="/investors/types/non-accredited-unaccredited-investors">accredited investor</a> can now be accomplished through taking tests, adding to the existing wealth requirements that had already been in place.</li> <li>The cap on the amount an individual can invest for Reg CF offerings is capped for non accredited investors. This cap previously applied to accredited investors as well, but has since been lifted.</li> </ul> <p>These changes have helped to create healthy growth for several platforms. We have observed investing portals close shop over the years, but an increase in consolidation and acquisition has accelerated.</p> <p> </p> <h3>Wefunder</h3> <p>Wefunder's Nick Tommarello announced their <a href="https://wefunder.com/updates/135066">#1 spot in market share via their year end review</a>. They credit the sharp increase in growth to the custodian structure to investments they rolled out in Q2. This groups all investors as a single entity to simplify the cap table and paperwork processing. This is appealing to both entrepreneurs and investors.</p> <p><img alt="Wefunder 2020 Review" data-entity-type="file" data-entity-uuid="d70b790c-7e28-45df-9fb6-b1741a54b39c" src="/sites/fundwisdom.com/files/inline-images/wefunder-review.JPG" style="width:700px;" class="autofloat-even " /></p> <p>They set a goal to increase market share past 50% in 2021. They achieved close to $5 million in revenue for 2020 running at a "small" net loss. Though they are a B Corp so income level is not the focal metric.</p> <ul> <li>538 startups raised money since inception</li> <li>$87.2 million raised in 2020</li> <li>$204 million raised since inception</li> <li>$5 million revenue for 2020 prior to full GAAP review, growth resulting in $8 Mil run rate</li> <li>$4 Billion in follow on investments by institutional investors</li> <li>25 full-time salaried employees</li> <li>iPhone app created December</li> </ul> <p>Only a few days after the post there are dozens of comments on the announcement including praise, discussion on investing support, and suggestions for improvements with customer engagement.  I agree with Nick in not thinking it would take so long for the regulations to get rolled out as they are today, but join in the congratulations for growth and results achieved.</p> <h3>StartEngine</h3> <p>Max Crawford authors regular updates on the overall industry and StartEngine performance and he released the 2020 <a href="https://www.startengine.com/blog/startengines-2020-in-review/">StartEngine's Review.</a></p> <ul> <li>150 companies raised money in 2020</li> <li>$250 million raised since inception</li> <li>$137.9 mil raised in 2020</li> <li>$24.3 mil in money raised for StartEngine across 16,682 individual investors </li> <li>49 full time employees</li> </ul> <h3> </h3> </div> <span rel="schema:author"><span lang="" about="/users/brian-thopsey" typeof="schema:Person" property="schema:name" datatype="">Brian Thopsey</span></span> <span property="schema:dateCreated" content="2021-01-04T02:15:50+00:00">Sun, 01/03/2021 - 21:15</span> <div class="field field--name-field-tags field--type-entity-reference field--label-hidden field__items"> <div property="schema:about" class="field__item"><a href="/tags/analytics" hreflang="en">Analytics</a>, <a href="/tags/investment-activity" hreflang="en">Investment Activity</a>, <a href="/tags/platforms" hreflang="en">Platforms</a></div> </div> <div id="comment-section"> <div class="title-line"></div> <div id="comment-container"> <div> </div> </div> <div class="cleared"></div> </div> Mon, 04 Jan 2021 02:15:50 +0000 Brian Thopsey 20626 at https://fundwisdom.com The Impact of Covid-19 on Startup Investing in Funding Portals https://fundwisdom.com/article/brian-thopsey/impact-covid-19-startup-investing-funding-portals <span property="schema:name">The Impact of Covid-19 on Startup Investing in Funding Portals</span> <div property="schema:text" class="field field--name-body field--type-text-with-summary field--label-hidden field__item"><p>The Covid-19 (Coronavirus) created a wave that shocked the world, wreaking havoc on so many, but for a lucky few can result in opportunity. Jobs were lost, businesses continue to shut down and a shudder of uncertainty continues for so many, yet the US stock market continues to climb higher since the brief March correction. We look to make sense of it by sharing data and strategies from professional investors that have continued to come out on top in times of uncertainty in both public and private markets.<br /> <img alt="S&amp;P 500 Market performance 2020" data-entity-type="file" data-entity-uuid="3b772609-37a5-4ca8-9b90-e48f71f8850e" src="/sites/fundwisdom.com/files/inline-images/stockmarket2020.JPG" style="margin:10px;" class="autofloat-odd " /></p> <h3>How will Covid-19 Continue to Impact My Portfolio?</h3> <p>Many average individual investors are spending their extra time, from not being able to go places, investing and trading, riding a bull run from the March dip. I am amazed at the growing places I am hearing stock tips. If you're portfolio contains heavily weighted public equities in the US stock market, it’s likely you’ve seen the value of your pot tumble from news of the pandemic spread, but then recover, hopefully ending the 2020 year ahead.</p> <p>While many suffer, I feel lucky to be healthy, with a steady income, looking to assess ways to tackle this storm to ensure a continued financial stability. I look to find opportunities of value in times of market dips and uncertainty. Over the years I have worked with public companies on their digital transformation, but have focused my equity analysis on private equity at Fund Wisdom. I aim to draw connections with the macro economic challenges more readily observable in public markets to the private startup space.</p> <p>After reviewing the overall market performance from an index of the S&amp;P I look to understand how the uncertainty may be measured. We can get a gauge on this through the CBOE Volatility Index (VIX).</p> <p><img alt="VIX 2020" data-entity-type="file" data-entity-uuid="968525b5-eb6e-49da-909e-cef2877be8ec" src="/sites/fundwisdom.com/files/inline-images/VIX%202020.JPG" class="autofloat-even " /></p> <p style="margin-bottom: 0in; background: #ffffff; border: none; padding: 0in">Increasing US Federal debt, uncertainty on vaccination schedules are major factors in the spikes that can be seen in the chart for the year. As a result, there has been a significant reduction in the liquidity in certain asset classes and overall lending. <a href="https://www.bain.com/insights/the-impact-of-covid-19-on-private-equity/">Research by Bain and Company</a> discussed Covid-19 and its market implications, stating ‘the impact will not be known for several quarters. The challenge arises knowing where and when to invest. Investing with a short term focus in a highly volatile market increases risk, however investing for the long term allows you to pick up some bargain investments if you are able and willing to hold over the next 3-10 years. This will hold true for both public and private markets. Being familiar with geographical approaches to the pandemic and how specific governments/central banks are navigating tax, monetary policy and the like can also be beneficial for minimizing risk in your portfolio, particularly if certain areas are heavily reliant on one particular industry.</p> <p style="margin-bottom: 0in; background: #ffffff; border: none; padding: 0in; page-break-before: always">Many industry professionals have commented on the implications of Covid-19 for the average investor. Conor Moore, Partner at KPMG Private Enterprise discussed the new business opportunities that are beginning to arise out of the Covid-19 gloom. For example, business to business (B2B) companies <a href="https://home.kpmg/xx/en/blogs/home/posts/2020/04/venture-capital-response-to-covid-19.html">‘developing more robust communications software systems’</a> to tackle the new remote working environment. Further professionals such as the <a href="https://a16z.com/2020/07/30/fintech-newsletter-july-2020/">Fintech Team at Andreessen Horowitz </a>looked into the impact of Covid-19 through the Banks, finding the general sentiment to be ‘oddly optimistic’, with Banks being better prepared for the financial repercussions of Covid-19 (perhaps learning from the troublesome 2008 period) and also finding largely positive consumer behavior with ‘no drastic change in consumers ability to pay off their loans’. The question arises as to whether government stimulus programs are the underlying backbone behind this consumer tendency and what exactly will happen when it all dries up...</p> <h2>Opportunity</h2> <p>It’s evident that the pandemic has had a devastating impact on small businesses worldwide, although investing in large public companies is effective for a long term, lower risk portfolio, many individuals are still seeking innovative companies able to come out at the forefront of the pandemic.</p> <p>Some industries and businesses have been hit hard, but the fundamentals of the business is still strong with cash on hand to weather the storm and recover, creating a great value buy. News of the vaccine rolling out globally provides some hope, but how this will impact in the short and long term is not certain. Almost all industries have seen some kind of turmoil during the crises, turning this into your time to buy when others don't recognize the long term value is a winning strategy.</p> <p>We look to find and share resources to gain an edge on the market. I have seen several advertisements by <a alt="Leaderboard" href="https://track.flexlinkspro.com/a.ashx?foid=1156697.140930743.I4282627&amp;foc=2&amp;fot=9999&amp;fos=1" rel="nofollow" tabindex="-1" target="_blank" title="Motley Fool Premium Services">The Motley Fool offering research and tips </a> for investors. We have partnered with them via an affiliate relationship because of how helpful many of the forum and message board discussions have been for me. We are interested in your opinion on the public market stock advisor tool. It offers 2 new stocks each month, leveraging the active community that originally attracted me to the site. They discuss reviewing various asset classes, focusing on both beginner and advanced investors, but seems to be focused primarily on public markets. </p> <h3>Value: Travel, Hospitality, &amp; Retail</h3> <p>Research by <a href="https://www.mckinsey.com/business-functions/risk/our-insights/covid-19-implications-for-business#">Mckinsey </a>showed that revenues in the fashion industry will ‘likely fall by 27 to 30 percent from the year before’. A nightmare for some investors with a heavily weighted portfolio towards this industry that may need to liquidate, but an opportunity for you.</p> <p>Statista is a useful resource when it comes to accessing Covid-19 statistics which showcased <a href="https://www.statista.com/statistics/1104316/coronavirus-month-over-month-retail-sales-development-by-sector-us/">monthly changes in retail sales across various industries in the United States</a>. They provide useful insights into how various sectors are developing post pandemic. Resources like this can allow you to navigate different industries and uncover value investments in public and private.</p> <p><a href="/investors/platforms">Non Accredited Investing Portals</a> like <a href="https://www.startengine.com/explore">StartEngine offer 9 retail focused startups raising capital</a>.</p> <p> </p> <p><a href="https://www.startengine.com/explore"><img alt="Retail Investments StartEngine" data-entity-type="file" data-entity-uuid="848d6958-b9d8-4eb9-80b1-c2c27b654f5f" src="/sites/fundwisdom.com/files/inline-images/retail-%20startengine.JPG" class="autofloat-odd " /></a></p> <h3>Bubble?</h3> <p>Despite the many losers to the Coronavirus, it’s evident some industries have been thriving. The "work from home" WFH, culture has led to a spike in online shopping and hence many E-commerce focused companies have seen a spike in earnings. A survey by <a href="https://searchengineland.com/covid-consumers-pessimistic-but-spending-more-online-331519">Engine</a> found that on average people are spending 10-30% more online. A further survey conducted by <a href="https://www.valassis.com/">Valassis</a> of 1000 US adults found that 42% said they were spending more online and only 8% stating they were spending less. The challenge as we see it is trying to understand what the inevitable drop in spending in these areas will be when brick and mortar purchasing resumes. Many companies are frantically fighting to transition to this digital focused way of life. We have observed digital natives like E-commerce giants Amazon and Ebay spike as can be see in the chart below. The question is if too much growth is now baked into the current market price and we are seeing a bubble? </p> <p><img alt="e-commerce bubble" data-entity-type="file" data-entity-uuid="203f3478-12fc-4d1d-b258-68e7763f3027" src="/sites/fundwisdom.com/files/inline-images/e-commerce.JPG" class="autofloat-even " /></p> <p>While it is possible public companies may be selling at a high price to value ratio in the e-commerce space private markets may hold further potential from the limited access. Wefunder currently lists <a href="https://wefunder.com/explore/ecommerce">17 companies listing their shares for sale</a> in the sector and <a href="https://www.startengine.com/explore">StartEngine offers 13</a>.</p> <p><a href="https://wefunder.com/explore/ecommerce"><img alt="Wefunder e-commerce" data-entity-type="file" data-entity-uuid="624381a8-8be4-4a96-afa4-7fb6f28b82be" src="/sites/fundwisdom.com/files/inline-images/wefunder-commerce.JPG" style="width:500px;" class="autofloat-odd " /></a></p> <p> Food and beverage sales are up, although with a different buying psychology. People are not able to eat at restaurants as much, causing grocery purchasing to increase. Research by <a href="https://www.shipbob.com/">Shipbob</a> (a shipping and fulfillment partner for e-commerce stores) found that the month over month increase in online sales for food and beverage is 18.8%.</p> <h2>Getting to grips with Covid-19</h2> <p>The impact from Covid-19 will continue for the foreseeable future. It’s important to stay up to date with the changes and impacts this can have on your portfolio. Knowing when to stay out of the market and manage your risk, or buy in times of uncertainty is what will distinguish those that are able to achieve long term results, even during turmoil.</p> </div> <span rel="schema:author"><span lang="" about="/users/brian-thopsey" typeof="schema:Person" property="schema:name" datatype="">Brian Thopsey</span></span> <span property="schema:dateCreated" content="2021-01-01T19:32:17+00:00">Fri, 01/01/2021 - 14:32</span> <div class="field field--name-field-tags field--type-entity-reference field--label-hidden field__items"> <div property="schema:about" class="field__item"><a href="/tags/non-accredited" hreflang="en">Non Accredited</a></div> </div> <div id="comment-section"> <div class="title-line"></div> <div id="comment-container"> <div> </div> </div> <div class="cleared"></div> </div> Fri, 01 Jan 2021 19:32:17 +0000 Brian Thopsey 20625 at https://fundwisdom.com https://fundwisdom.com/article/brian-thopsey/impact-covid-19-startup-investing-funding-portals#comments https://fundwisdom.com/article/brian-thopsey/impact-covid-19-startup-investing-funding-portals#comments Find Financial Advisors Focusing on Startups https://fundwisdom.com/article/brian-thopsey/find-financial-advisors-focusing-startups <span property="schema:name">Find Financial Advisors Focusing on Startups</span> <div property="schema:text" class="field field--name-body field--type-text-with-summary field--label-hidden field__item"><p style="margin-bottom: 0in">Finding advisors focused on startups can seem like a challenge to many investors including myself. Where do you even begin looking? How do I know the advisor is the real deal? What startups or resources should I focus on? These are just a few of the many questions that come up trying to locate someone with a specialization in this budding market.</p> <div style="float:right;"><img alt="Financial Advisors Office" data-entity-type="file" data-entity-uuid="096d876f-aaa2-4cdf-9918-eafcbfb915f5" src="/sites/fundwisdom.com/files/inline-images/pexels-curtis-adams-3958959.jpg" style="width:500px;margin:10px;" class="autofloat-odd " /></div> <p style="margin-bottom: 0in; background: #ffffff; border: none; padding: 0in">In this article, we’ll pull in the facts and figures to help you make well rounded decisions about your financial future. You will also find a list of professionals that can help with financial planning. We believe when it comes to startup investing, a foundational level of knowledge around the sector and who are the leaders can make the difference between losses and gains.</p> <p> </p> <h2 class="western">Why Startups?</h2> <p>Startups offer investors great growth potential and the ability to follow a small company along it’s journey to industry success. <a href="https://admiralmarkets.com/education/articles/general-trading/investing-in-startups?regulator=fca">Admiral Markets</a>, a reputable startup investing firm describes the 4 characteristics of the modern startup as being based on innovation, having growth as the main objective, using external financing and comprising of a small team of highly skilled individuals.</p> <p>The Motley Fool also highlights <a href="https://www.fool.co.uk/mywallethero/your-money/learn/why-and-how-to-invest-in-startups/">many of the positives to startup investing</a>. Unique opportunities, low investment limits and exclusive perks not available through investments in large cap equities all go into making the startup realm a very lucrative place to put your money.</p> <p> </p> <h2>Where to find Startup Investment Opportunities</h2> <p>Investment opportunities are everywhere, the biggest challenge is figuring out how you can get a piece of the pie for yourself. Publications such as Fundwisdom (among others) can be very beneficial in your decision making.</p> <p>Crowdfunding websites offer investors the ability to buy ownership in a company, more often than not at a much lower cost than it would with a venture capital or similar fund. For a roundup of some of the best, modern crowdfunding sites we recommend <a href="https://www.thebalancesmb.com/best-crowdfunding-sites-4580494">an article from the balance small business</a> providing an overview of many crowdfunding sites, their fees and how they work.</p> <p>Your local chamber of commerce is another resource in your arsenal when it comes to finding startup investing opportunities. A simple google search and scroll through a local directory can provide you with insightful information on the different startups in your area, some with investment opportunities just waiting to be seized. Many startup investment platforms have very small minimum investment requirements and present a wide array of investment opportunities spanning across many exciting industries.</p> <p>As of writing this, the world is plagued with coronavirus and the physical networking ability blocked for many individuals. LinkedIn is a great platform fledgling venture capitalists can use for networking with startup owners and taking the proactive approach to finding investment opportunities.</p> <p> </p> <h2>Save $ in Taxes Investing Startups</h2> <p>When it comes to investing in startups, a ‘self directed IRA’ as described by Startup knowledge center <a href="https://knowledge.ourcrowd.com/invest-in-venture-capital-with-a-self-directed-ira">OurCrowdKnowledge</a> is a great option due to its tax advantages. These returns can thus be held in a retirement account and will be tax deferred. What’s more, these investment alternatives have a low correlation with other asset classes, therefore may allow investors to hedge their investments during times of market volatility in stocks and bonds.</p> <p> </p> <h2>The Figures</h2> <p>When addressing any potential investment fund opportunity, you need to understand the data. For example, <a href="https://www.barrons.com/report/top-financial-advisors/100/2018">Barron’s has some useful information on the top financial advisors each year</a>, these figures can be used as a benchmark for performance and a way to select top firms. Barron's reviews client's average net worth, total assets, location and more. Knowing a fund manager's track record gives you insight into historical returns but cannot guarantee future performance.</p> <p>Barron’s also possess a range of economic data on various <a href="https://www.barrons.com/market-data?mod=BOL_TOPNAV">investment opportunities </a>allowing you to make sound decisions on when and where to invest your capital. For example, the ‘stock movers’ section lists various equities showing the most movement within a certain period. Although these may not always be the most sensible investments.</p> <p>A fund's past performance can often give a good indication into the future, however research and careful consideration of many variables is required to ensure a certain investment is right for you. Cryptocurrencies for example, can offer the possibility for high return yet also bear a lot of risk.</p> <p style="margin-bottom: 0in"> </p> <h2 class="western">Top Advisors</h2> <p style="margin-bottom: 0in; background: #ffffff; border: none; padding: 0in">There are advisors for each and every asset class, helping you work towards reaching your wealth goals whilst accounting for your desired level of risk. Most easiest to find are those that have expertise in public equities and debt. Barron’s showcases the track records and information on what they deem top financial advisors. We have not been able to locate any of these with expertise in startup offerings on the portals we cover.</p> <p>An innovative tool known as <a href="https://www.riamatch.com/">RIA Match</a> allows you the ability to connect with financial advisors quickly and easily, matching your financial goals and requirements to their listings of advisors. <a href="https://successionlink.com/">Successionlink</a> is another tool offering a similar service and those in need of a service. LinkedIn can be used to locate advisors.</p> <h3>Assess Your Current Advisor</h3> <p>Reviewing advisor performance can often be a challenge. <a href="#54b43e5c49a0">Ken Schapiro</a> of Condor Capital Management built <a href="https://www.backendbenchmarking.com/">Backend Benchmarking, </a>a tool designed to help you better manage your portfolio. Using this platform can cut through the clutter of biased reporting, allowing you to make an informed decision on the current performance of your money.</p> <p style="margin-bottom: 0in"> </p> <h2 class="western" style="background: #ffffff; border: none; padding: 0in">Should you give Startups a go?</h2> <p style="margin-bottom: 0in; background: #ffffff; border: none; padding: 0in">All in all, an up and coming startup can be exciting for many (particularly new) investors. Although the returns can be vast, due diligence is required around the company to ensure the investment meets your risk appetite. Comparing the startup investment opportunity with other alternative investments may give you an accurate depiction of how one opportunity fares against another.</p> <p style="margin-bottom: 0in; background: #ffffff; border: none; padding: 0in"> </p> <p style="margin-bottom: 0in; background: #ffffff; border: none; padding: 0in">This article is written in collaboration with <a href="/users/callum">Callum Lepley.</a></p> </div> <span rel="schema:author"><span lang="" about="/users/brian-thopsey" typeof="schema:Person" property="schema:name" datatype="">Brian Thopsey</span></span> <span property="schema:dateCreated" content="2020-08-27T12:58:29+00:00">Thu, 08/27/2020 - 08:58</span> <div class="field field--name-field-tags field--type-entity-reference field--label-hidden field__items"> <div property="schema:about" class="field__item"><a href="/tags/non-accredited" hreflang="en">Non Accredited</a></div> </div> <div id="comment-section"> <div class="title-line"></div> <div id="comment-container"> <div> </div> </div> <div class="cleared"></div> </div> Thu, 27 Aug 2020 12:58:29 +0000 Brian Thopsey 9956 at https://fundwisdom.com https://fundwisdom.com/article/brian-thopsey/find-financial-advisors-focusing-startups#comments https://fundwisdom.com/article/brian-thopsey/find-financial-advisors-focusing-startups#comments Event: Panel on Alternatives to Diversify your Portfolio https://fundwisdom.com/article/brian-thopsey/event-panel-alternatives-diversify-your-portfolio <span property="schema:name">Event: Panel on Alternatives to Diversify your Portfolio</span> <div property="schema:text" class="field field--name-body field--type-text-with-summary field--label-hidden field__item"><p>Looking to explore innovative ways to grow your wealth?</p> <p><a href="https://www.eventbrite.com/e/alternative-investing-virtual-meetup-tickets-115999432425?aff=FundWisdom"><img alt="Event Banner Alternative Investing panel" data-entity-type="file" data-entity-uuid="01938423-12aa-45b8-bf9f-862c4b27cebc" src="/sites/fundwisdom.com/files/inline-images/AltFi%20Conf%20Eventbrite%20Banner%20%281%29%281%29_0.png" style="width:600px;" class="autofloat-odd " /></a></p> <h2>Attend our Panel Event</h2> <div style="float:right"> <table id="m_-6682442498691132156calendarContainer" style="color:#222222; font-family:Roboto, RobotoDraft, Helvetica, Arial, sans-serif; font-size:small; font-style:normal; font-variant-ligatures:normal; font-weight:400; white-space:normal; text-decoration-style:initial; text-decoration-color:initial; width:150px; background:white; border-collapse:collapse; border:none" width="0"> <tbody> <tr> <td style="border-bottom:none; padding:3px; background-color:#efefef; border-top:6px solid white; border-right:6px solid white; border-left:6px solid white" valign="top"> <div> <p align="center" style="text-align:center"><span style="font-family:Roboto,RobotoDraft,Helvetica,Arial,sans-serif"><span style="line-height:19.5px"><b><span style="font-size:10.5pt"><span style="line-height:21px"><span style="font-family:Helvetica, sans-serif"><span style="color:#303030">September 2020</span></span></span></span></b></span></span></p> </div> </td> </tr> <tr> <td id="m_-6682442498691132156dayContainer" style="border-bottom:6px solid white; padding:3px; background-color:white; border-top:none; border-right:6px solid white; border-left:6px solid white" valign="top"> <div> <p align="center" style="text-align:center"><span style="font-family:Roboto,RobotoDraft,Helvetica,Arial,sans-serif"><b><span style="font-size:54pt"><span style="font-family:Helvetica, sans-serif"><span style="color:#303030">17</span></span></span></b></span></p> </div> </td> </tr> </tbody> </table> </div> <p><style type="text/css"> <!--/*--><![CDATA[/* ><!--*/ <!--td {border: 1px solid #ccc;}br {mso-data-placement:same-cell;}--> /*--><!]]>*/ </style></p><p>Join us to explore novel ways to invest in something new. By being a part of this event, you’ll have learning opportunities and help from experts on approaching your high-growth investments, providing more potential at success each step along your journey. It’s a great way to earn, learn, and invest all in one spot. Seize your moment as a high investor by joining our event today! discuss their paths to helping people access these previously private markets.</p> <p> Expect to learn about alternative virtual Investments - looking beyond the norm at innovative online portal strategies. Our panelists will share unique strategies to structure investments in equity of startups, real estate, wine, and more. By joining us, you’re earning learning opportunities along with possibilities abound from the huge investment returns from our event.</p> <p> </p> <p><a href="https://www.eventbrite.com/e/alternative-investing-virtual-meetup-tickets-115999432425?aff=FundWisdom">Register with EventBrite</a></p> <p> </p> <p style="text-align:start; margin-bottom:10px">Panelists and what I am excited to learn more about from each</p> <ul data-key="76" data-slate-fragment="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"> <li data-key="77"><span data-key="78"><span data-offset-key="78:0">Moderator: Andrew Savikas, Founder </span></span><a data-key="79" href="https://yieldtalk.com"><span data-key="80"><span data-offset-key="80:0">YieldTalk</span></span></a><span data-key="81"><span data-offset-key="81:0"> </span></span></li> <li data-key="82"><span data-key="83"><span data-offset-key="83:0">Chuck Pettid, CEO of </span></span><a data-key="84" href="https://republic.co"><span data-key="85"><span data-offset-key="85:0">Republic Crowdfunding Portal</span></span></a> <ul> <li data-key="86">Republic's recent release of their <a data-saferedirecturl="https://www.google.com/url?q=https://fundwisdom.us3.list-manage.com/track/click?u%3D0dad474b0bacb25172ab9a735%26id%3D75289891f7%26e%3D5d6619dbe5&amp;source=gmail&amp;ust=1598547107099000&amp;usg=AFQjCNGWiFEOSwkGpOsaiHPXHzlnsrZdEA" href="https://fundwisdom.us3.list-manage.com/track/click?u=0dad474b0bacb25172ab9a735&amp;id=75289891f7&amp;e=5d6619dbe5" target="_blank">investable Note</a>, which I <a data-saferedirecturl="https://www.google.com/url?q=https://fundwisdom.us3.list-manage.com/track/click?u%3D0dad474b0bacb25172ab9a735%26id%3D0b91b0e7a1%26e%3D5d6619dbe5&amp;source=gmail&amp;ust=1598547107099000&amp;usg=AFQjCNG4CKct4c6E27rNpGVDLIocCbbdBQ" href="https://fundwisdom.us3.list-manage.com/track/click?u=0dad474b0bacb25172ab9a735&amp;id=0b91b0e7a1&amp;e=5d6619dbe5" target="_blank">co-wrote an article with Brian of CrowdWise on funds which touches on the launch</a>. </li> </ul> </li> <li data-key="86"><span data-key="87"><span data-offset-key="87:0">Anthony Zhang, CEO of </span></span><a data-key="88" href="https://yieldtalk.com/go/vinovest/"><span data-key="89"><span data-offset-key="89:0">Vinovest</span></span></a> <ul> <li data-key="86">what operating without the same regulatory hurdles (since it is wine and not an investment security) enables. To learn more about Anthony check out <a data-saferedirecturl="https://www.google.com/url?q=https://fundwisdom.us3.list-manage.com/track/click?u%3D0dad474b0bacb25172ab9a735%26id%3Db57e265951%26e%3D5d6619dbe5&amp;source=gmail&amp;ust=1598547107099000&amp;usg=AFQjCNFGMGfQIIqpGk7DRYbly6my9xp1rw" href="https://fundwisdom.us3.list-manage.com/track/click?u=0dad474b0bacb25172ab9a735&amp;id=b57e265951&amp;e=5d6619dbe5" target="_blank">Andrew of YieldTalk's interview</a></li> </ul> </li> <li data-key="90"><span data-key="91"><span data-offset-key="91:0">Charles Clinton, CEO of </span></span><a data-key="92" href="https://yieldtalk.com/go/equitymultiple/"><span data-key="93"><span data-offset-key="93:0">EquityMultiple</span></span></a><span data-key="94"><span data-offset-key="94:0"> </span></span> <ul> <li data-key="90">Understanding more about how they are competing against <a data-saferedirecturl="https://www.google.com/url?q=https://fundwisdom.us3.list-manage.com/track/click?u%3D0dad474b0bacb25172ab9a735%26id%3Daae2816e94%26e%3D5d6619dbe5&amp;source=gmail&amp;ust=1598547107099000&amp;usg=AFQjCNFoLg7C9LwsCTH_idHPswgq3Da_2w" href="https://fundwisdom.us3.list-manage.com/track/click?u=0dad474b0bacb25172ab9a735&amp;id=aae2816e94&amp;e=5d6619dbe5" target="_blank">other Real Estate Investing Portals</a> and how this correlates to what we are seeing in equity.</li> </ul> </li> </ul> <p> </p> <h3>How this was Created</h3> <p>I have been collaborating with Brian Belley of CrowdWise and Andrew Savikas of YieldTalk for a few months now. We share a passion for the alternative investing market and decided to build this event to learn more about the investing portals and hear directly from the operators. We are paying for Remo.co to offer a premium virtual experience attempting to mimic a real world conference setup with tables to network along with a panel broadcast mode.</p> <p> </p> <p><em>We are currently seeking sponsors that share these passions. </em><a href="/contact">Contact us if interested</a>. We look forward to seeing you there.</p> <p> </p> <p><a href="https://www.eventbrite.com/e/alternative-investing-virtual-meetup-tickets-115999432425?aff=FundWisdom">Register Now</a></p> </div> <span rel="schema:author"><span lang="" about="/users/brian-thopsey" typeof="schema:Person" property="schema:name" datatype="">Brian Thopsey</span></span> <span property="schema:dateCreated" content="2020-08-26T01:40:02+00:00">Tue, 08/25/2020 - 21:40</span> <div class="field field--name-field-tags field--type-entity-reference field--label-hidden field__items"> <div property="schema:about" class="field__item"><a href="/tags/real-estate" hreflang="en">Real Estate</a>, <a href="/tags/platforms" hreflang="en">Platforms</a>, <a href="/tags/non-accredited" hreflang="en">Non Accredited</a></div> </div> <div id="comment-section"> <div class="title-line"></div> <div id="comment-container"> <div> </div> </div> <div class="cleared"></div> </div> Wed, 26 Aug 2020 01:40:02 +0000 Brian Thopsey 9955 at https://fundwisdom.com Reg CF Fund Analysis via CrowdWise Guest Post https://fundwisdom.com/article/brian-thopsey/reg-cf-fund-analysis-crowdwise-guest-post <span property="schema:name">Reg CF Fund Analysis via CrowdWise Guest Post</span> <div property="schema:text" class="field field--name-body field--type-text-with-summary field--label-hidden field__item"><p>I worked closely with CrowdWise founder, Brian Belley, to co-author a piece on startup funds available to non-accredited investors. We have been keeping <a href="/investors/funds">a list of funds and intelligence</a> on each, across alternative investing asset classes.</p> <p><a href="https://crowdwise.org/investing-basics/how-to-invest-in-equity-crowdfunding-funds-in-2020/"><img alt="CrowdWise Article screenshot" data-entity-type="file" data-entity-uuid="33805bf7-71b7-4cab-98b7-103ca34b2d49" src="/sites/fundwisdom.com/files/inline-images/CrowdWise%20Article%20screenshot.JPG" class="autofloat-odd " /></a></p> <p>I look forward to reading your comments on the original piece or below.</p> </div> <span rel="schema:author"><span lang="" about="/users/brian-thopsey" typeof="schema:Person" property="schema:name" datatype="">Brian Thopsey</span></span> <span property="schema:dateCreated" content="2020-08-17T02:24:13+00:00">Sun, 08/16/2020 - 22:24</span> <div class="field field--name-field-tags field--type-entity-reference field--label-hidden field__items"> <div property="schema:about" class="field__item"><a href="/tags/non-accredited" hreflang="en">Non Accredited</a></div> </div> <div id="comment-section"> <div class="title-line"></div> <div id="comment-container"> <div> </div> </div> <div class="cleared"></div> </div> Mon, 17 Aug 2020 02:24:13 +0000 Brian Thopsey 9951 at https://fundwisdom.com https://fundwisdom.com/article/brian-thopsey/reg-cf-fund-analysis-crowdwise-guest-post#comments https://fundwisdom.com/article/brian-thopsey/reg-cf-fund-analysis-crowdwise-guest-post#comments Reduce Fees Investing in Startups - Insight on 16 platforms https://fundwisdom.com/article/brian-thopsey/reduce-fees-investing-startups-insight-16-platforms <span property="schema:name">Reduce Fees Investing in Startups - Insight on 16 platforms</span> <div property="schema:text" class="field field--name-body field--type-text-with-summary field--label-hidden field__item"><p><img alt="Pinnacle of investing" src="/sites/fundwisdom.com/files/inline-images/pexels-stijn-dijkstra-2659475.jpg" style="float:right;margin:10px;width:300px;" class="autofloat-odd " />Fees can be a hidden nightmare, lurking in all corners of the investment landscape. When I put my hardearned money into an investment, my goal is to maximize the return and minimize the fees that eat away at those returns. Many don't know (or realize) all the hidden fees you're slapped with, whether it's in more transparent public markets or in opaque, previously private markets. We’ll dive into the fees we've uncovered in each of the startup equity investing platforms and strategies you can take to reduce them.</p> <p>You should more typically expect to pay a management fee for the administrative costs than a percentage on each transaction. As <a href="https://www.investopedia.com/articles/investing/092815/how-optimize-your-portfolio-and-reduce-fees.asp">an example</a>, a $100,000 portfolio paying 1% in fees annually over 20 years would equate to you shelling out $30,000, whereas reducing those fees to 0.5% would result in $10,000. Now that we’ve done the math, it's clear that ignoring fees can cause the demise of your investing journey.</p> <p>It's not just average investors that need to factor this analysis into their strategy. It affects professional investors as well. Fees are viewed as the most important factor when making fund commitments, <a href="https://pitchbook.com/news/reports/2018-annual-institutional-investors-survey">Pitchbook's annual institutional investor survey finds</a>.</p> <h2>Public Market Fees</h2> <p>Factors like who you choose for a trading platform or broker are usually the leading driver for fees paid. Brokers have been finding ways to drop upfront fees and profit from new hidden areas. <a href="https://track.flexlinkspro.com/a.ashx?foid=1156697.139959643.I3740237&amp;foc=2&amp;fot=9999&amp;fos=1">Personal Capital charges 0.89%</a>, <a href="https://track.flexlinkspro.com/a.ashx?foid=1156697.138832797&amp;foc=1&amp;fot=9999&amp;fos=1">WealthSimple charges 0.25%</a>, and <a href="https://m1finance.8bxp97.net/c/2240068/721137/10646">M1 charges 0</a> but <a href="/affiliate/m1-finance">makes interest in a few different forms</a>. In an effort to compete for your wallet, Fidelity and other larger players have dropped their upfront fee as M1 and Robinhood have. </p> <h2>Fees are Under Pressure</h2> <p>Increasing competition and choice in the market are making platforms ever more competitive. Not only were fees ‘viewed as the most important decision when making a fund commitment, they're also the area with the worst alignment with general partners, <a href="https://pitchbook.com/news/reports/2018-annual-institutional-investors-survey">according to a 2018 Pitchbook survey</a>. And with funding portals improving and evolving, it’s no mystery that the state of fees is coming into question.</p> <h2>Comparing Brokers and Platforms</h2> <p>No doubt broker fees can add up. With each broker offering different rates, services, and support. It’s important to weigh the pros and cons of each. Brian Belley at Crowdwise helps break down the <a href="https://crowdwise.org/funding-portals/crowdfunding-intermediaries-funding-portals-vs-broker-dealers/">difference between a broker-dealer and a funding portal</a>.</p> <p>Funding Portals Improving Economics of Venture Finance - Syndicates -</p> <p> </p> <p><a href="/platform-fees"><img alt="screenshot of fees for platforms" data-entity-type="file" data-entity-uuid="8e10e01e-e904-45aa-9aeb-f8c45d05e277" src="/sites/fundwisdom.com/files/inline-images/fee-screenshot.JPG" class="autofloat-even " /></a></p> <h2>Keeping up with Changing Fees</h2> <p>The latest offerings from platforms and changes in fee structures are constantly fluctuating as these companies compete for your business. Percentage-wise, a larger investment results in a lower fee. So, reducing the number of trades and increasing the amount in the transaction being invested, is a sound strategy. <a href="https://wefunder.com/post/46-new-policy-0-carried-interest-for-25k-investments">Wefunder</a> makes it advantageous to invest larger amounts. As an example of a recent change they're offering <a href="https://wefunder.com/post/46-new-policy-0-carried-interest-for-25k-investments">a new policy with ‘0% carried interest for $25k+ investments’</a>.</p> <p> </p> <h2>Develop a Passive Portfolio with Funds</h2> <p>Regardless of which startup platform you invest through,<a href="/investors/funds"> actively managed funds</a> will always demand a higher fee than passive funds like an index tracker. So pour yourself a hot cup of coffee and settle in to browse around various funds to find a percentage fee you’re comfortable paying.</p> <p>One issue with employing a fund manager is incentive alignment - are the people managing your money seeking the best return for you or themselves? Fortunately, <a href="https://pitchbook.com/news/reports/2018-annual-institutional-investors-survey">only 9.8% are seeing ‘poor alignment’ according to the Pitchbook survey</a>. However, there is still room for ‘alignment improvement’ which we are seeing investing portals help to chip away at.</p> <p><a href="https://www.angelcapitalassociation.org/blog/understanding-an-online-funding-platform-angellist-syndicates/">The Angel Capital Association helps to break down how to leverage AngelList Syndicates</a>, so make the most of this resource. For startup investing, many platforms are offering <a href="/platform-fees">transparency about each fee entrepreneurs and investors must pay which we built a table to help showcase</a>. Platforms such as AngelList are offering back office services to fund managers and angels such as their syndicate platform, whereby <a href="https://techcrunch.com/2013/07/27/angellist-syndicates-lets-angels-get-carry-for-helping-a-startup-raise-money/">AngelList takes 5%</a>.</p> <p><a href="/investors/funds"><img alt="Fund Fees" data-entity-type="file" data-entity-uuid="4d99cb4c-4f58-4123-a841-5d5916c17dfc" src="/sites/fundwisdom.com/files/inline-images/fund-fees.JPG" class="autofloat-odd " /></a></p> <h2>Take Note of ‘Hidden Fees’</h2> <p>Some brokers will slap you with a fee for inactivity or simply for using the platform on a yearly basis. Sneaky huh? Knowing these rates can save you from a world of unnecessary expenses.</p> <p> </p> <h2>So Can I Avoid Fees?</h2> <p>The short answer is no. We’ve shared strategies to reduce fees, but unfortunately, they’ll always be in place to allow the portals, brokers, platforms, etc. to operate their businesses making markets. So my advice to friends, and those that reach out interested in this market, is to educate yourself, understand where the fees may be hiding and their impact to navigate the investment landscape and maximize your returns.</p> </div> <span rel="schema:author"><span lang="" about="/users/brian-thopsey" typeof="schema:Person" property="schema:name" datatype="">Brian Thopsey</span></span> <span property="schema:dateCreated" content="2020-08-16T23:46:15+00:00">Sun, 08/16/2020 - 19:46</span> <div class="field field--name-field-tags field--type-entity-reference field--label-hidden field__items"> <div property="schema:about" class="field__item"><a href="/tags/platforms" hreflang="en">Platforms</a></div> </div> <div id="comment-section"> <div class="title-line"></div> <div id="comment-container"> <div> </div> </div> <div class="cleared"></div> </div> Sun, 16 Aug 2020 23:46:15 +0000 Brian Thopsey 9946 at https://fundwisdom.com Why Invest in Startups with Equity Funding Portals https://fundwisdom.com/article/brian-thopsey/why-invest-startups-equity-funding-portals <span property="schema:name">Why Invest in Startups with Equity Funding Portals</span> <div property="schema:text" class="field field--name-body field--type-text-with-summary field--label-hidden field__item"><p>Let’s begin by addressing the why behind investing in your future. Your why is truly important when it comes to setting financial goals and making quantifiable investment targets. To many, that ‘why’ is to build a nest egg for retirement, or perhaps funding a child's college education (good luck!), but this is different for everyone. Take a few minutes to think about why you want to invest in the first place and the level or risk you are looking to take.</p> <h2>Private/Public Equity</h2> <p>What comes to mind when you think of professional investors? Is it a silver haired white man smoking a cigar in a high rise Wall Street office? If so, I can’t say I blame you; the media has blinded you with this toxic vision. We’re here to show you how equity crowdfunding is providing access to a much more diverse set of investors and entrepreneurs.</p> <p>Many businesses require money, or cash, to grow. This is the basic premise of companies offering up equity ownership at different points in time during the growth and scale. In return for that money, founders are willing to provide an equity stake (i.e a piece of the company). With me so far?</p> <p><img src="/sites/fundwisdom.com/files/styles/max_1300x1300/public/2020-07/woman%20invest%20think.jpeg" style="float:right;margin:10px;width:350px;" class="autofloat-odd " />Now how that money is spent, whether it be on new technology, an employee training scheme, or simply a new coffee machine to replace the one Susan from the Sales team can’t stop using, the hope is, we are able to see a whopping return on our investment.  </p> <p>The funding we provide as investors give startups  access to cash, or liquidity, they need to gain market share. This money can be used to finance new growth strategies and ultimately take them from 0 to hero real quick. It’s clear how valuable your investment can be.</p> <h2><span style="font-size: medium;">Investing in Alternatives</span></h2> <p>An alternative investment is an investment in asset classes other than stocks, bonds, and cash. The term is a relatively loose one and includes tangible assets such as precious metals, art, or antiques as well as financial assets such as a real estate funds, commodities, private equity, hedge funds, venture capital, film production, and financial derivatives. These alternative investment assets have traditionally been held mostly by institutional investors or <a href="/investors/accredited-qualified-purchaser-investing" target="_blank">accredited</a>, high-net-worth individuals because of the complex nature and relative lack of liquidity.</p> <p>No doubt alternative investments can be a risky path to follow, especially if you don’t know what you’re doing. There’s a sea of <a href="/investors/platforms">platforms</a> setting out in the alternative investment space. Long gone are the days where only large scale institutions have access to this market. </p> <h2><span style="font-size: medium;">Advantages</span></h2> <p>Higher returns: Alternative investments can achieve a higher return than traditional investments alone. A key lesson when it comes to startup investing comes from the fact that the vast majority of your returns will be generated by a very few number of companies in your portfolio as <a href="https://www.toptal.com/finance/venture-capital-consultants/venture-capital-portfolio-strategy">Alex Graham shares on Toptal</a>. Seek out these winners. Simple, right? So, move past your failures to improve your process to seek out the home runs.</p> <p>Diversification: Investors can lower risk and control the correlation between investments by allocating funds across asset classes. With alternative investments a portfolio can lower dependency on the overall stock market's performance.</p> <h2><span style="font-size: medium;">Disadvantages</span></h2> <p>Accessibility: Historically only the wealthy had access and even as that changes there are restrictions if you do not reach the SEC's bar for wealth. </p> <p>Liquidity: Typically you lock your money up longer with many alternatives particularly private equity in startup companies. This may mean you have to wait years before you can cash out the investment. This is also changing as more secondary markets are opening.</p> <p>Fees: Alternative investments often have high minimum investments and <a href="/crowdfunding-investors/funds-being-raised-by-platform" target="_blank">fee structures</a> compared to mutual funds and ETFs.</p> <p>Transparency: There is much less opportunity to find and publish <a href="/analytics">verifiable performance data</a>.</p> <h2><span style="font-size: medium;">JOBS Act makes Alternative Investments more accessible</span></h2> <p>While most of the alternative investment types have been familiar to the investment community for a long time, one alternative investment solution, equity crowdfunding, is quite new. The Jumpstart Our Business Startups Act, or JOBS Act, is a law intended to encourage funding of United States small businesses by easing various securities regulations. President Barack Obama signed it into law on April 5, 2012, and the rulings of Title III of the act will likely come into effect in late 2014. Then, the JOBS Act will enable non-accredited investors to invest in start-up businesses and private firms.</p> <p><span style="line-height: 1.538em;">Accordingly, equity crowdfunding is likely a great solution for any investors interested in alternative investments. </span>The benefits of diversification and higher returns from equity crowdfunding can boost the value of your investment portfolio. Furthermore, accessibility may also be improved since businesses offering equity will often include additional information about what is required in Regulation D filings.</p> <p>To find information on the latest alternative investment offerings or private equity offerings you can visit the <a href="/crowdfunding-investors">Fund Wisdom Offerings section</a>. If you are looking to further assess these investments or gain further insight into the market, <a href="/crowdfunding-investors/premium-equity-investment-intelligence">we provide solutions to help</a>.</p> <p> </p> <h2>5 Tips How to Get Started</h2> <p>Now your why is locked in. How do you go about finding opportunities to invest in?  Well, begin by​ mapping out your objectives, followed by industries you’d be comfortable investing in ​ . Usually these industries are those you have previous knowledge in or a prior background in. If you don’t understand a business model, it may not be the most viable investment.</p> <p>There are many ways you can begin as a retail investor. Perhaps your friend Paul from down the street has an idea he needs money for and you happen to have a spare $5000 at your disposal. Now we’re not saying to simply invest in an idea on a pot of luck because your friend has a passion and is rather persuasive. ​It’s vital you do your due diligence. </p> <p>Once you have a foundational idea in place, it’s all about ​access. Having access to a network of founders willing to part with some of their company in exchange for your hard earned money.  </p> <p> Alongside simply tapping into that local network of yours. Friends or former colleagues on ​LinkedIn ​ who work in their own start-up can provide a handful of great, investment opportunities.  Building a local network can bring a flow of future opportunities and open doors to new connections when you least expect them.  </p> <p> So, now you get the gist of it, perhaps revamp your LinkedIn profile, begin sharing content and build a brand around your name. Yes, we know how much you love sharing funny videos on Facebook but i’m sure you can take a minute to tell people about your new investing journey.  Who knows where it might lead.</p> <p>Many factors should be considered to ensure above market returns when investing in risky startups. Risk is increased when accessing the equity security in the early stage firms raising capital online. We offer a 5 tips to improve access and performance.</p> <h3>1. Determine whether you should invest</h3> <p>Before planning to invest online, it is important to understand the inherent risk of investing in equity online.</p> <p>The Financial Industry Regulatory Authority <a href="http://www.finra.org/Investors/SmartInvesting/Retirement/Smart401kInvesting/investing/">(FINRA) offers advice on investing retirement assets like 401ks</a>. FINRA is dedicated to protecting investors and safeguarding market integrity in a manner that facilitates vibrant capital markets. USwitch also offers a similar guide to general investing via an article on <a href="https://www.uswitch.com/investments/best-investment/">10 steps to choosing the best investment</a>.</p> <p>Most offerings are currently from companies in their early stages, or <a href="/crowdfunding-businesses/feature-your-startup">startups</a>. These types of firms have potential for incredibly high returns, but with that comes risk. Many of these companies do not make it past their first few years of existence.</p> <p>Every investor has a different risk tolerance and every investor has a different objective. You need to be familiar with how to structure your portfolio in a way that puts you at the highest chance of reaching these goals and “landing on a unicorn” as Alex Graham of Toptal writes. Of course, this really all comes down to the number of companies you intend to invest in, however as pointed out in the aforementioned article, there “is a trade off between portfolio size and quality.”</p> <h3>2. Duration and Longevity</h3> <p>The duration you are willing to part with your hard earned cash and the amount you can put in should be considered prior to investing. Many companies offering their equity online will take years to become profitable and provide investors the return desired. These early stage firms also often require several rounds of investment. The reduction in liquidity, or the ability to cash out, is a factor that drives the attractive returns. Assessing each option is what makes the differens between those that consistently achieve returns and those that do not.</p> <p>Knowing that a potential <a href="/crowdfunding-investors">investment</a> will be inaccessible until a certain date may give you an insight into what investments you will want to avoid, reducing your investment options to those that won't tie up your money for longer than you can afford. Knowing whether invested capital will be available, and when, is crucial for every investor.</p> <h3>3. Consider how your age affects your investment</h3> <p>Younger investors may prefer to choose higher-risk investment options that produce higher returns but are less certain. People who are close to or are in retirement, however, may be more inclined to choose low-risk investments to make sure their money is as safe as possible.</p> <h3>4. Risk and Lifestyle Considerations</h3> <p>If you have dependent children, you may be more inclined to find low risk investments to help make sure your hard-earned money doesn’t get wasted. If, however, you are living without anything or anyone tying down your choices, then you might consider riskier investments that have higher returns.</p> <h3>5. Portfolio Management</h3> <p>Deciding how to balance your investments can be a challenge. Aggressive investment options like those being offered online, which provide attractive returns, can be balanced with lower-risk investments in debt and public equity. <a href="/crowdfunding-investors/invest-startup-funds-and-angel-index-funds">Funds are also starting to be created</a> to offer diversification and reduction in risk. </p> <p dir="ltr">With all the knowledge above in your hand, what you need is someone who can provide you with a way to best utilize your resources and act as your loyal partner. <a href="/contact">Contact us </a>to help.</p> <h3>Picking Investments and Due Diligence</h3> <p>Next up is all about ​identifying the right opportunities to invest in.</p> <p><a href="/%E2%80%8Bhttps%3A//blog.samaltman.com/how-to-invest-in-startups">Sam Altman, previous head of Y Combinator, states,</a> “One way to do really well as a startup investor is to get good at predicting who is going to be great before they actually are.”  Often a great investment sign is a young founder with the potential to improve fast and bring about a large return of investment. It’s easy to get a feel for a company's future success by asking yourself whether this is someone you’d work for or whether you can picture them becoming a thought leader in the industry. A founder with a mission and a relentless determination to achieve this mission are winning characteristics. </p> <p>It’s important to see companies not for what they are now, but for what they can become. ​ An industry with growth opportunities will provide the potential for a startup to flourish and see a great return on investment in the coming years.</p> <p><a href="/article/brian-thopsey/how-invest-equity-crowdfunding-portals">Now you have established why and are prepared, read on to learn how to invest</a> with some examples.</p> </div> <span rel="schema:author"><span lang="" about="/users/brian-thopsey" typeof="schema:Person" property="schema:name" datatype="">Brian Thopsey</span></span> <span property="schema:dateCreated" content="2020-07-11T13:08:04+00:00">Sat, 07/11/2020 - 09:08</span> <div class="field field--name-field-tags field--type-entity-reference field--label-hidden field__items"> <div property="schema:about" class="field__item"><a href="/tags/capital-types" hreflang="en">Capital Types</a>, <a href="/tags/non-accredited" hreflang="en">Non Accredited</a></div> </div> <div id="comment-section"> <div class="title-line"></div> <div id="comment-container"> <div> </div> </div> <div class="cleared"></div> </div> Sat, 11 Jul 2020 13:08:04 +0000 Brian Thopsey 9936 at https://fundwisdom.com https://fundwisdom.com/article/brian-thopsey/why-invest-startups-equity-funding-portals#comments https://fundwisdom.com/article/brian-thopsey/why-invest-startups-equity-funding-portals#comments How to Invest in Equity Crowdfunding Portals https://fundwisdom.com/article/brian-thopsey/how-invest-equity-crowdfunding-portals <span property="schema:name">How to Invest in Equity Crowdfunding Portals</span> <div property="schema:text" class="field field--name-body field--type-text-with-summary field--label-hidden field__item"><p>The allure of investing early in a high growth startup company is the potential for huge returns, but historically was restricted to the wealthy. Now anyone can invest in publicly available offerings due to regulatory changes improving accessibility. We wrote a detailed article explaining the <a href="/article/brian-thopsey/why-invest-startups-equity-funding-portals">benefits of investing in equity funding portals and preparing</a>. The cap for <a href="https://www.sec.gov/news/press-release/2020-55">Regulation Crowdfunding was just increased to $5 million</a>. There is a multitude of platforms that are offering investments so choices are abundant. This causes a wide range in fees and legal structures behind each offering and platform.</p> <p> </p> <h2>Open Access from Regulatory Changes</h2> <p>Alistair Barr, Annie Massa and Sarah McBride of Bloomberg put it best with their article, "<a href="https://www.bloomberg.com/news/articles/2019-10-22/the-big-money-in-startups-comes-from-investing-before-the-ipo"><em>The Big Money in Startups Comes From Investing Before the IPO</em></a>." Investing in the next big thing at an early stage historically has been a major challenge for most. In many countries there are laws and restrictions, based upon <a href="http://www.fundwisdom.com/crowdfunding-investors/types/retail-unaccredited-non-accredited" tabindex="-1">wealth requirements,</a> to invest in early stage high growth companies. In the USA qualifying as an <a href="/crowdfunding-investors/accredited-qualified-purchaser-investing" tabindex="-1" target="_blank">accredited investor</a>, as defined by the <a href="http://www.fundwisdom.com/about/jobs-act-title-iii" tabindex="-1" target="_blank">SEC</a>, historically was required to participate in most offerings but that has <a href="/about/jobs-act-title-iii" tabindex="-1">recently changed</a>. Innovative platforms below bring expanded access and educational resources to learn how to invest within this changing regulatory environment.</p> <p> </p> <h2>Where to Invest</h2> <h3>Investing Portals, Equity Crowdfunding Platforms</h3> <p>Before investing in any startup, you’ll need to ensure you’ve conducted the relevant research around the company raising funds and the crowdfunding issuer helping to facilitate the transaction.</p> <p><a href="/investors/platforms/"><img alt="All investing platforms we carry in our database" data-entity-type="file" data-entity-uuid="8a8aa89e-7b74-45ae-93d3-030dbafd22c5" src="/sites/fundwisdom.com/files/inline-images/platform-view-all.PNG" style="width:500px;" class="autofloat-odd " /></a><br /> <a href="/investors/platforms/equity-crowdfunding-investing-portals">Equity crowdfunding platforms</a> are a subset of <a href="/investors/platforms/">investing portals</a> that help connect individual investors with access to previously inaccessible investment opportunities in startup and growing small businesses online.  At Fund Wisdom we <a href="/article/brian-thopsey/top-10-equity-crowdfunding-platforms-2017">review, provide a ratings system</a>, <a href="/article/brian-thopsey/top-10-equity-crowdfunding-portals-2019">rank top portals</a>  and provide <a href="/analytics">market insight </a>on the industry. Don’t fall asleep too soon, this is important stuff. A useful article on YieldTalk by Andrew Savikas gives some <a href="https://yieldtalk.com/retiring-crowdfilings-reg-cf-research/">insight into 6 sites investors can use to research intermediaries</a> helping to offer up equity. Each site has its own, unique taste depending on the kind of information you’re seeking to find. So, grab a coffee and get to work.</p> <p>Equity crowdfunding is essentially an investment arrangement. We define investing portals focused on <a href="/investors/types/accredited-qualified-purchaser-investing">accredited investors</a> and equity crowdfunding portals focused on <a href="/investors/types/non-accredited-unaccredited-investors">non-accredited</a>. The investment is loosely defined as an agreement in which ownership in a company is issued via equity to investors based on the size of the individual investors’ investment. Inherent within almost all equity investing platforms is the need to register as an investor as a means of verification.</p> <p>There are equity crowdfunding platforms such as <a href="https://peerrealty.com/">PeerRealty</a> and <a href="https://circleup.com/">CircleUP</a> that act as intermediaries fostering the relationship between investors and companies; this also applies to funds engaged in active fundraising rounds. In certain cases these companies will hold invested funds in escrow until the round ends successfully before funds transfer.</p> <p>Other companies namely <a href="https://www.crowdfunder.com/">Crowdfunder</a> and <a href="https://www.fundable.com/">Fundable</a>  provide a platform for companies to advertise their fundraising efforts to the masses. Here investors either make a nonbinding pledge otherwise known as a show of interest, or the investor chooses to go-all-in and sign a commitment to invest within a specific period of the funding rounds closing. Platforms offerings are not all mutually exclusive, with each offering a mix of advantages.</p> <p>Most platforms have built out extensive sections to help educate both investors and entrepreneurs like <a href="https://angel.co/help">OurCrowd and Angellist</a>. Several independent educational sites have been created to help guide investors and entrepreneurs through the process of using these platforms. Brian Belley created <a href="https://crowdwise.org/start/">CrowdWise</a> to provide a collaborative educational environment for investors in equity crowdfunding. That means <a href="https://crowdwise.org/courses/">courses, eBooks, videos, blog posts</a>, and more. Salvador Briggman of CrowdCrux built <a href="https://crowdcrux.lpages.co/free-equity-crowdfunding-course/">a free course</a> on equity crowdfunding,  how it works, use it in your business, and the regulations.</p> <h3>Asset Classes</h3> <p>Equity isn’t the only avenue you can leverage to make your money work for you. At Fund Wisdom we have primarily focused on startup equity, but there are investing portals built for real estate and debt specifically that each have a greater amount of capital invested. Also the structure of how the company is raising money may differ from traditional equity to portals that focus on blockchain and cryptocurrencies. Assuming you haven’t been living under a rock for the past few years, the blockchain has ever expanded with the likes of Bitcoin and countless new cryptocurrencies paving the way towards a new investment standard.</p> <p>Large funds have been created with strategies centered around cryptocurrencies. If Cryptocurrencies don’t float your boat, ever heard of Real Estate? You know, the housing we live in? Many millionaires have been made through their investments in Real Estate. People always need housing after all.</p> <h3>Minimums</h3> <p>Platforms such as <a href="https://www.earlyshares.com/">EarlyShares</a> and <a href="http://peerrealty.com/">PeerRealty</a> require substantial investment minimums which exclude most non-accredited investors due to the restrictions placed on the amount of required annual investment.  </p> <p>Investors can place startup investments with less than $1000.</p> <h3>Funds</h3> <p><a href="/investors/funds"><img alt="List of funds" data-entity-type="file" data-entity-uuid="07ae37f0-f045-4ba0-a083-39f8808d0e94" src="/sites/fundwisdom.com/files/inline-images/funds.PNG" style="width:500px;" class="autofloat-even " /></a></p> <p>Many platforms have created <a href="/investors/funds">fund structures</a> with Special Purpose Vehicles (SPVs) via service providers like Assure. The benefit here is that they offer an unprecedented investment opportunity for gaining exposure to an entire asset portfolio with one single investment. <a href="https://angel.co/funds">AngelList</a> operate funds or <a href="/investors/funds/angellist-syndicates">syndicates</a> that own shares in numerous companies or asset classes.</p> <h4>Tax Advantaged Retirement Accounts</h4> <p><a href="http://www.rocketdollar.com?utm_campaign=Fund%20Wisdom&amp;utm_source=Fund%20Wisdom&amp;utm_medium=Affiliates"><img alt="Rocketdollar invest" sizes="(min-width: 1290px) 325px, (min-width: 851px) 25vw, (min-width: 560px) 50vw, 100vw" src="/sites/fundwisdom.com/files/styles/max_325x325/public/2020-03/rocketdollar.PNG?itok=wCeIkyCL" srcset="/sites/fundwisdom.com/files/styles/max_325x325/public/2020-03/rocketdollar.PNG?itok=wCeIkyCL 325w, /sites/fundwisdom.com/files/styles/max_650x650/public/2020-03/rocketdollar.PNG?itok=fbmAoJsH 650w, /sites/fundwisdom.com/files/styles/max_1300x1300/public/2020-03/rocketdollar.PNG?itok=RZwDumgf 1300w" typeof="foaf:Image" class="autofloat-odd " /></a> We partner with <a href="http://www.rocketdollar.com?utm_campaign=Fund%20Wisdom&amp;utm_source=Fund%20Wisdom&amp;utm_medium=Affiliates">RocketDollar </a>as they offer Self Directed retirement accounts (IRAs) and 401ks.  Invest securely and easily in Real Estate, Startups, and more. They recently published <a href="https://www.rocketdollar.com/blog/the-secure-act-what-it-means-for-your-retirement-account?utm_campaign=Fund%20Wisdom&amp;utm_source=Fund%20Wisdom&amp;utm_medium=Affiliates">an article that details some of the benefits for Coronavirus relief changes</a> that went into effect that can be applied to their accounts.  Offerings are set at $15 a month and $30 a month for their plans.</p> <article class="align-left"> <div class="field field--name-field-media-image field--type-image field--label-visually_hidden" data-quickedit-field-id="media/2029/field_media_image/en/default"> <div class="field__label visually-hidden">Image:</div> <div class="field__item"> </div> </div> </article> <p> </p> <h3>Increasing Funding Caps - Regulation A</h3> <p>Under regulatory amendments made to the JOBS Act and Regulation A; the rules are mandated by Title IV of the Jumpstart Our Business Start-ups (JOBS) Act. Eligible entities can raise up to $50 million in any 12-month period. The final rules commonly known as Regulation A+ illustrate two distinct fundraising tier offerings:</p> <ul> <li><a href="https://www.sec.gov/news/pressrelease/2015-49.html">Tier 1</a>. Tier 1, for offerings of securities of up to $20 million in a 12-month period, with not more than $6 million in offers by selling security-holders that are affiliates of the issuer; and Tier 2, for offerings of securities of up to $50 million in a 12-month period, with not more than $15 million in offers by selling security-holders that are affiliates of the issuer. Both Tiers are subject to certain basic requirements while Tier 2 offerings are also subject to additional disclosure and ongoing reporting requirements (<a href="https://www.sec.gov/news/pressrelease/2015-49.html">US Securities and Exchange Commission</a>).</li> </ul> <p style="margin-left:30.0pt; margin:0in 0in 8pt"> </p> <ul> <li><a href="https://www.sec.gov/news/pressrelease/2015-49.html">Tier 2</a>: Tier 2, for offerings of securities of up to $50 million in a 12-month period, with not more than $15 million in offers by selling security-holders that are affiliates of the issuer. Both Tiers are subject to certain basic requirements while Tier 2 offerings are also subject to additional disclosure and ongoing reporting requirements.</li> </ul> <p>There are no limitations placed on <a href="/investors/non-accredited-unaccredited-investors">non-accredited investors</a> access to Tier 1 offerings. Alternatively, there are some limitation placed on non-accredited investor access to Tier 2 offerings. For instance, non-accredited investors can’t invest more than 10% of their net income (individual or joint with a spouse) or 10% of their net worth (<a href="https://www.sec.gov/news/pressrelease/2015-49.html">US Security and Exchange Commission</a>).</p> <h3>Cashing Out - Liquidity</h3> <p>Equity crowdfunding involves the purchase of equity, in the form of shares predominately, in privately held companies. In most cases these shares aren’t and cannot be traded on public exchanges. In certain cases some tier 2 companies opt for public listings. And though some crowdfunding entities do make regular income distributions you are still very likely to wait for quite some time before you realize any real return on your crowdfunding equity investment. And that presupposes that the company actually survives let alone thrives. Generally real returns are only realized after the company is bought out or launches an IPO or alternative ICO/ STO. <a href="/platform/sharespost">SharesPost </a>has been a leader in providing access to cashing out earlier for investors and employees alike.</p> <p>In equity crowdfunding the company or entity valuation is a direct function of the dollar amount raised against the amount of equity offered, independent of company fundamentals. If the entity scales, the individual investors could realize an appreciation in their stake. If a company gets acquired or launches an IPO, investors may realize a substantial return on their initial investment. Conversely, shareholders can lose their shirts in unsuccessful ventures.</p> <h2>Conclusion</h2> <p>Regardless of whether your portfolio comprises of Cryptocurrency, Real Estate or Private Equity. It’s vital you do your research on each wealth creation vehicle and just how well it aligns with your goals. We hope the early stage growth company you invest in will provide you healthy returns and maybe even achieve an initial public offering or acquisition. We look forward to hearing about your experience in the comments section below or contact form.</p> </div> <span rel="schema:author"><span lang="" about="/users/brian-thopsey" typeof="schema:Person" property="schema:name" datatype="">Brian Thopsey</span></span> <span property="schema:dateCreated" content="2020-07-10T11:35:59+00:00">Fri, 07/10/2020 - 07:35</span> <div class="field field--name-field-tags field--type-entity-reference field--label-hidden field__items"> <div property="schema:about" class="field__item"><a href="/tags/platforms" hreflang="en">Platforms</a>, <a href="/tags/non-accredited" hreflang="en">Non Accredited</a></div> </div> <div id="comment-section"> <div class="comment-number post-section-title"> <span> Comments</span> </div> <div class="title-line"></div> <div id="comment-container"> <div> <article class="comment byuser comment-author-admin bypostauthor even thread-even depth-1" id="li-comment-10"> <div class="comment-entry" > <div class="comment-avatar"> <article class="simpnews-user-info"> <div class="field field--name-user-picture field--type-image field--label-hidden field__item"> <a href="/user/0" hreflang="und"><img src="/sites/fundwisdom.com/files/styles/thumbnail/public/default_images/person_8x10.png?itok=5xxcXpg4" width="80" height="100" alt="Profile picture for user Robert" typeof="foaf:Image" /> </a> </div> </article></div> <div class="comment-info"> <div class="comment-author"> <span rel="schema:author"><span lang="" typeof="schema:Person" property="schema:name" datatype="">Eric Ribo (not verified)</span></span> </div> <div class="comment-date"> Thu, 12/26/2019 - 08:22 <span property="schema:dateCreated" content="2019-12-26T13:22:41+00:00" class="hidden"></span> </div> <span class="comment-reply"> <drupal-render-placeholder callback="comment.lazy_builders:renderLinks" arguments="0=146&amp;1=default&amp;2=en&amp;3=" token="_RhtPiJZ7QBs_Qz_0KecQq-kDWRxEZ8Vq1S2xsZEqag"></drupal-render-placeholder> </span> <span class="comment-content"> </span> <div class="comment-content content"> <div property="schema:text" class="field field--name-comment-body field--type-text-long field--label-hidden field__item"><p>Can you share classes?</p> </div> </div> </div> <div class="cleared"></div> </div> <!-- End Comment entry--> </article> <div class="indented"><article class="comment byuser comment-author-admin bypostauthor even thread-even depth-1" id="li-comment-10"> <div class="comment-entry" > <div class="comment-avatar"> <article class="simpnews-user-info"> <div class="field field--name-user-picture field--type-image field--label-hidden field__item"> <a href="/users/brian-thopsey" hreflang="en"><img src="/sites/fundwisdom.com/files/styles/thumbnail/public/pictures/me2.PNG?itok=qR2OZ0r7" width="76" height="100" alt="Profile picture for user Brian Thopsey" typeof="foaf:Image" /> </a> </div> </article></div> <div class="comment-info"> <div class="comment-author"> <span rel="schema:author"><span lang="" about="/users/brian-thopsey" typeof="schema:Person" property="schema:name" datatype="">Brian Thopsey</span></span> </div> <div class="comment-date"> Mon, 12/30/2019 - 07:45 <span property="schema:dateCreated" content="2019-12-30T12:45:09+00:00" class="hidden"></span> </div> <span class="comment-reply"> <drupal-render-placeholder callback="comment.lazy_builders:renderLinks" arguments="0=148&amp;1=default&amp;2=en&amp;3=" token="9pO8XuJ0em3AXaemO1hPnxgCnShUFx1dFNaFegh3_8c"></drupal-render-placeholder> </span> <span class="comment-content"> </span> <div class="comment-content content"> <div property="schema:text" class="field field--name-comment-body field--type-text-long field--label-hidden field__item"><p>Can you provide further detail on what you mean by classes? Are you referring to Educational content or types of assets covered?</p> </div> </div> </div> <div class="cleared"></div> </div> <!-- End Comment entry--> </article> </div> </div> </div> <div class="cleared"></div> </div> Fri, 10 Jul 2020 11:35:59 +0000 Brian Thopsey 6776 at https://fundwisdom.com Top Real Estate Investing Portals https://fundwisdom.com/article/brian-thopsey/top-real-estate-investing-portals <span property="schema:name">Top Real Estate Investing Portals</span> <div property="schema:text" class="field field--name-body field--type-text-with-summary field--label-hidden field__item"><p>This is the second part of a 2 part series covering ways to capitalize on real estate crowdfunding. <a href="/article/brian-thopsey/capitalize-real-estate-investing-platforms">Go to Part 1, in case you missed it</a>, where I provide context on the real estate industry and innovative funding approaches being taken. At Fund Wisdom we have primarily focused on startups offering equity to invest in directly through portals, but as more real estate is offered on these platforms we assess this area of investment and the overlap. I detail some of the top real estate portals based upon transaction volume and break out based upon real estate asset classes of funding.</p> <div style="float:right;width:410px;"><img src="/sites/fundwisdom.com/files/styles/max_1300x1300/public/2020-04/patrick-tomasso-nApljhT9kfM-unsplash.jpg" style="margin:10px;width:400px;" class="autofloat-odd " /></div> <h2>Debt: Marketplace P2P Property Lending</h2> <p><strong>Capital Repayment with Interest</strong> - Debt crowdfunding is the funding of debt from individuals, groups, or institutions, more commonly known as peer-to-peer lending (P2P lending). The practice of matching borrowers and lenders through online platforms associated with debt crowdfunding allow borrowers to gain access to funds quickly and often at lower interest rates than those offered by banks.</p> <p>The benefit to investors is the inherent ability to lend money at a range of interest rates based on proprietary credit scores assigned by each platform. Investors can potentially receive regular, attractive returns while leveling risk across various borrowers.</p> <p>Some platforms take some or all an existing real estate loan, secured by a deed on the underlying property, and syndicate it out to a network of individual investors at a fixed rate of return. Other platforms act as the lender, issuing a loan to a real estate developer or flipper. In either case, the platform’s network of investors is offered a flat annual rate of return. According to <a href="https://passiveincomemd.com/tips-real-estate-crowdfunding/">Passive Income MD</a> "typically between 7% and 12% - over a relatively short term - generally 6 to 18 months. Since these investments are secured by the property and short in a term, they tend to be a good fit for more risk-averse investors."</p> <p><strong>Benefits: </strong>the<strong> </strong>ability to customize investment based on financial obligation, fixed payments, and the ability to diversify the portfolio.</p> <p> </p> <h3><span id="cke_bm_231S" style="display: none;"> </span>Debt Platforms</h3> <p>The wide range and unique variety of portals allow anyone interested in real estate to gain access to a wide ranging market and new ways to invest. Crowdfunding real estate investing grants investors the access they need to engage in a variety of real estate investing projects. We look to rank based upon amount transacted and money raised (according to Crunchbase) to fund the business.</p> <ol> <li><a href="https://www.iintoo.com"><img alt="IIntoo Realty Shares" data-entity-type="file" data-entity-uuid="694c4274-916f-4abf-ab40-c2921baf8dcf" src="/sites/fundwisdom.com/files/inline-images/iintoo_logo.jpg" style="width:150px;margin:10px;float:left;" class="autofloat-even " /> RealtyShares/Iintoo</a> IIRR Management Services acquired RealtyShares increasing the overall assets under management to $2.5 billion. The company operates an online marketplace assisting its members in browsing real estate investments and interfacing with an investment page for specific offerings. They offer multi-family residential, office, industrial, self-storage, retail, medical office, and hospitality facilities and structures them in the form of debt and equity. Fees for the debt are 2%.</li> <li><a href="https://imp.i315845.net/c/2240068/863210/11670" tabindex="-1" target="_top"><img alt="Peer Street #1" data-entity-type="file" data-entity-uuid="92160b9d-40fc-4357-b78d-e18fa7e5f0c3" src="/sites/fundwisdom.com/files/inline-images/peer-street-num1.JPG" style="width:200px;margin:10px;float:left;" class="autofloat-odd " /></a><a href="https://imp.i315845.net/c/2240068/863210/11670" tabindex="-1" target="_top"> PeerStreet </a> - raised $110 million and transacted an additional $4.25 billion late 2019, but the only AUM number posted is from early 2019 at $1 billion.  They built a vetted network of private lenders with diverse sources of capital, providing lending at a local community level. These P2P real estate loans typically carry 6-36 month terms. Once you invest in a loan or note through PeerStreet, you must remain in the investment until it pays off. They lowered their minimum to $100 in April 2019. They do initial review and vetting. Focused on accredited investors only at the time of writing. We also have an affiliate partnership with them.<br /> The Real-Estate Crowdfunding Review lists it's rating of the the <a href="https://www.therealestatecrowdfundingreview.com/top-100-sites-ranked-and-reviewed">top platforms for accredited investors for 2019</a> and a <a href="https://www.therealestatecrowdfundingreview.com/top-14-nonaccredited-realestate">separate listing for those that do not meet this wealth requirement</a>. The top rated is Peer Street<img border="0" height="1" src="https://www.ftjcfx.com/image-7643827-12960644" width="1" class="autofloat-even " />.</li> <li><a href="https://realtymogul.pxf.io/c/2240068/1028711/13202"><img alt="RealtyMogul Logo" data-entity-type="file" data-entity-uuid="1853d8ba-b914-4656-89f3-96a8cd8dbc48" src="/sites/fundwisdom.com/files/inline-images/realty%20mogul%20logo.png" style="width:200px;margin:10px;float:left;" class="autofloat-odd " /></a><a href="https://realtymogul.pxf.io/c/2240068/1028711/13202">RealtyMogul</a> raised $45 million and transacted $2 billion. They operate as an online marketplace for real estate investment for accredited and non accredited investors. The platform enables investment in real estate investments that have already been evaluated via their due diligence team. Borrowers acquire business or commercial purpose mortgage loans and sponsors to raise equity. RealtyMoguls platform also offers fix-and-flip loans, bridge and permanent loans, and joint venture equity. It serves accredited investors via mostly finished assets in residential, retail, commercial, office, and industrial projects. We have an affiliate relationship with this team.</li> <li><a href="https://groundfloor-finance.sjv.io/dooa6M"><img src="/sites/fundwisdom.com/files/styles/medium/public/ground-floor-logo-color.JPG" style="width:200px;margin:10px;float:left;" class="autofloat-even " /></a><a href="https://groundfloor-finance.sjv.io/dooa6M">GROUNDFLOOR</a> raised $38 million and posted annual transactions of $100 million. We have not been able to source the gross total of transactions so it may be higher. They are a US-based online real estate lending platform. It was the first company to achieve SEC qualification utilizing Regulation A+; this market is also open to non-accredited investors. Type of asset: developments. Real estate asset class: residential land. We recently established an affiliate relationship with them.</li> <li><a href="https://www.sharestates.com/">Sharestates</a> raised $30 million and transacted $2.5 billion. They function as an online marketplace offering a minimum investment of $5000. The company allocates investments in cash flow properties. It enables investors to earn returns on real estate properties, and property developers to fund projects.</li> <li><a href="https://patchofland.com/">Patch of Land</a>, raised $25 million and transacted $725 million, an online peer-to-peer real estate crowdfunding marketplace and loan provider. The portal connects real estate developers requiring financing with lenders and real estate investors. The company focuses on six to 24-month real estate first-lien mortgage loans with borrower guarantees. Type of asset: development and finished assets.</li> <li><a href="https://www.fundthatflip.com/">Fund That Flip</a>: raised $11 million, focuses on residential real estate redevelopment projects serving accredited investors in the United States.</li> <li><a href="https://capitalondemand.com/invest/">Capital On Demand</a> no data for funding - investors share in net profits of property. Tax Treatment is pass-through of depreciation and mortgage expense deductions; some capital gains treatment also possible.</li> <li><a href="https://www.bitcasas.com/">Bitcasas </a>no data for funding - focused on cross-border platform for investment in the mortgage loans backed by the US Real Estate. They use blockchain based tokenization to enable fractional ownership of real estate mortgage loans. BitCasas plans to issue legally compliant<br _ngcontent-c5="" /><br /> Security Token Offerings (STOs) under Reg D 506c exemption for US accredited investors and Reg S exemption for international investors. Our friends at <a href="https://www.crowdcrux.com/review-of-bitcasas-real-estate-crowdfunding-website/">CrowdCrux did a review on this portal.</a></li> </ol> <p> </p> <h2>Equity</h2> <p><strong>Investment for Ownership Stake</strong> enables investors to distribute risk across a number of shareholders. The backer collects shares in exchange for the capital pledged. <a href="https://www.equities.com/news/real-estate-crowdfunding-platforms-what-to-look-for">Equities.com published an article in 2017</a> suggesting what to look for in investments in real estate equity funding portals. At Fund Wisdom we focus on this investment structure applied to early stage startup companies that offer the potential for high returns due to the risk. The risk is typically greater in <a href="/platform">startup equity funding portals</a> than real estate. Below are a list of real estate portals we have reviewed:</p> <ol> <li> <p><a href="https://fundrise.com/">Fundrise</a> $4.9 Bil transacted real estate investments <a href="https://fundrise.com/historical-performance">showcased on their historical investment performance page, also stating average annualized returns in 2019 of </a>9.47%. They raised $55.5 million. Fundrise provides development and finished assets across residential and commercial. Between 2014 and 2018, the company averaged 8.76% to 12.25% annualized yields, net fees (1.0%), and an upfront cost of 2% in asset origination fees. They allow for $500 minimums and were founded in 2012. They also help <a href="https://fundrise.com/education/blog-posts/the-top-10-opportunity-zones-in-the-united-states">showcase top opportunity zones</a>, or tax advantaged areas that are encouraging investment.</p> </li> <li> <p><a href="https://crowdstreet.4cl7.net/kjzVZv">CrowdStreet</a> in early 2019 they had <a href="https://www.crowdstreet.com/resources/news/500-million-invested/">$500 million transacted</a> and at the time of writing this raised $24.9 million. The platform provides a virtual commercial real estate marketplace that connects accredited investors with institutional real estate investments. Its online portal supports commercial real estate developers and operators to acquire, convert, and manage investors for their projects. Type of asset: development and finished assets. We have an affiliate relationship.</p> </li> <li> <p><a href="https://cadre.pxf.io/5bAKM2">Cadre </a>raised $133 Million according to Crunchbase as of July 2021. They provide access to institutional-quality real estate deals, in large apartment buildings, hotels, and offices which typically mature over 5 years or longer. They state they identify properties by using a tech-driven analysis and industry leading expertise. Their focus is fewer high quality deals over volume. They generate most of their revenue from recurring management fees of 1.5% of Net Asset Value (NAV) versus one-time transaction fees, and leverage incentives tied to deals outperforming their target levels, therefore incentives are tied to long-term deal performance, not high transaction volume. They require a minimum of $50,000 to invest, which goes into a Special Purpose Entity (SPE) Real Cadre LLC who is the pass-through owner of the equity or debt in the property. They offer a secondary market to sell off shares prior to property sale date a few times a year. Ryan Williams is the CEO and Co-Founder and has been able to help secure funding from VCs like Andreesen Khosla and Goldman. We have an affiliate relationship.</p> </li> <li> <p><a href="https://equitymultiple.4drrzr.net/c/2240068/751084/10943"><img alt="Equity Multiple" data-entity-type="file" data-entity-uuid="dd845517-f8ba-415e-896f-7e04884117e3" src="/sites/fundwisdom.com/files/inline-images/equitymultiple-logo.JPG" style="width:200px;margin:5px;float:left;" class="autofloat-odd " /></a><a href="https://equitymultiple.4drrzr.net/c/2240068/751084/10943">EquityMultiple</a>, raised $4 million, focused on institutional-grade commercial real estate projects while offering both debt and equity investments. The company operates as an online real estate investing and finance platform connecting accredited investors with commercial real estate assets. We had a chance to team up with Yieldtalk and Crowdwise to build <a href="/article/brian-thopsey/event-panel-alternatives-diversify-your-portfolio">an event</a> with their founder and CEO Charles Clinton. We have an affiliate relationship.</p> </li> <li> <p><a href="https://www.equitydoor.com/invest/">Equitydoor</a> no transaction or funding data found. They focus on the US market and offer $1,000 minimums. Investors can inspect offering materials, such as legal due diligence items. Legal documents, signatures and fund transfers can all be handled through the platform so investors and issuers can complete the entire transaction through the secure website. The issuer covers the fees for setting up the project.</p> </li> <li> <p><a href="https://www.1031crowdfunding.com">1031 Crowdfunding</a> no transaction data found. They offer commercial equity investments that qualify for 1031 exchanges for people who own existing real estate and want to sell without being taxed. The platform offers single property investments and multi-property funds.</p> </li> <li> <p>Republic recently expanded by <a href="https://republic.co/real-estate">breaking out a real estate specific section of their investment offerings</a>. We had been following their <a href="/platform/republic">equity and crypto based startup base</a>.</p> </li> </ol> <h3>Funds</h3> <p>If you are willing to incur management fees as you believe in the skills of a portfolio manager and look to attain diversification platforms are offering funds as well. Many of those listed already offer funds but below are a few companies that focus just in funds:</p> <ul> <li> <p><a href="https://www.alphaflow.com/">AlphaFlow</a> - They raised $6.4 million. Fees: 1%/year Minimum: 1 year lock up and $10,000. They buy debt and equity and offer advisory and portfolio management services.</p> </li> <li> <p><a href="https://www.realcrowd.com/">RealCrowd</a> – raised $1.7 million. Commercial real estate investment market. The average individual deal-size for investment opportunities falls just shy of $30 million, while funds have ranged in sizes ranging from $15 million to $150 million.</p> </li> </ul> <h4>REITs</h4> <p>Real Estate Investment Trusts (REITs) are funds offering diversification with some tax advantages. I was lucky enough to work at Iron Mountain during the t<a href="https://investors.ironmountain.com/news-and-events/press-releases/press-release-details/2014/Iron-Mountain-REIT-Conversion-to-Enhance-Stockholder-Returns/default.aspx">ransition the firm went through to qualify as a REIT</a> in 2014. Crowdfunding platforms have specialized and designed to solve niche conditions within the real estate market. Each investment vehicle offers a unique focus and value proposition to investors. Fundrise and RealtyMogul offer semi-blind eREIT funds that aggregate properties throughout the U.S. These investments offer built-in diversity and very low minimums, making them appropriate for less experienced investors. These REITs offer investors a way to invest in multiple properties or types of real estate:</p> <ul> <li> <p><a href="https://fundrise.com/reits/income-ereit/view">Fundrise eREIT</a>: generating continual cash flow through debt investments in commercial real estate assets (pays a 9% dividend, 2020).</p> </li> <li> <p><a href="https://www.therealestatecrowdfundingreview.com/realtymogul-mogulreit-i-and-ii">MogulREIT I</a>: the fund makes investments in debt and debt-like real estate-related assets.</p> </li> <li> <p><a href="https://www.therealestatecrowdfundingreview.com/realtymogul-mogulreit-i-and-ii">MogulREIT II</a>: the fund invests in multifamily apartment communities</p> </li> <li> <p><a href="https://diversyfund.com/?cjevent=513f46d43ea811ea82ee02250a24060d">DiversyFund</a> The DiversyFund Growth REIT is SEC-regulated that builds wealth by investing in cash-flowing apartment buildings.</p> </li> </ul> <p>REITs are apt to flourish in an environment of easy monetary policy where the mostly hybrid form of real estate vehicle, acts like a fund offering broad diversification with tax incentive. Technology is driving real estate investing from single unit rentals and land leasing to large funds like this.</p> <h3>Success Factors: Achieving Funding for Real Estate Projects</h3> <p>A solid crowdfunding effort is due in large part to building traction, growing number of adopters and advocates towards gaining approval and establishing social proof among existing and potential investors. Social proof is where observers follow the actions of others with the belief that the "others" know something they don't. <span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" style=""><a href="https://learn.g2.com/consumer-reviews" rel="noopener" target="_blank">In 2017 G2 and Heinz Marketing</a> put out a report stating<a href="https://learn.g2.com/consumer-reviews" rel="noopener" target="_blank"> </a>92% of buyers are more likely to purchase after reading a trusted review. </span>Unbiased product reviews from an independent party are trusted over a brand's product description and content so most funding platforms have provided open feedback forum style review sites.</p> <p>The initial adopters and potential brand advocates influence investment. The confidence displayed by early adopters is critical to the achievement of crowdfunding efforts prior, during, and after the event which ultimately informs and authenticates the project. Scale determines how profitable a crowdfunding platform ought to be.</p> <h2>Top Value-Added Real Estate Websites</h2> <p>We also recognize sites that can be used to attain market insights by their collection of sale and rental listing data:</p> <ol> <li><a href="https://www.zillow.com/">Zillow</a> Market Cap: $10.5 Bil, allows users to post homes for sale and rent and known for the "Make Me Move" price. They offer advanced search capabilities accessing for sale and rental listings. The platform allows you to buy and sell houses directly through Zillow. They offer marketing solutions to assist real estate professionals to connect with consumers. They provide an application programming interface (API) and developer support network. The company operates the most popular suite of mobile real estate apps, with more than two dozen apps across all major platforms. They build their own value estimator: Zestimate. Other brands include StreetEasy, HotPads, and Naked Apartments, for business rental and mortgage professionals include Mortech, Dotloop, Bridge Interactive, and New Home Feed. They offer a home loans product, the affiliated lender providing mortgage pre-approval and financing. Zillow acquired <a href="https://www.trulia.com/">Trulia</a> in 2015 offering peer-reviewed recommendations, local insights, and map overlays. The site provides details on commuting, crime stats and reports, schooling, church locations, shopping and nearby businesses.</li> <li><a name="Bookmark" id="Bookmark"></a><a href="https://www.realtor.com/">Realtor.com</a>, Market cap: 6.9 Bil, offers statics about neighborhoods, a massive variety of listings that are customizable based on individual preferences, including apartment listings and regional mortgage rates.</li> <li><a href="https://www.homes.com/">Homes.com</a>: the site offers buyers, sellers, renters, and profit-seekers with current real estate information, tools, and home listing.</li> <li><a href="https://www.move.com/">Move Inc.</a> (the Move network includes Realtor.com) and has an established alliance with the National Association of Realtors, for operating Realtor.com, a <a href="https://newscorp.com/business/move-inc/">subsidiary of News Corp.</a>, market capitalization at 852.84 Mil, the company serves the Move Network of real estate websites.</li> <li><a href="https://homefinder.com/">Homefinder</a> is a real estate portal presenting listings to assist home buyers, sellers, renters, and landlords in achieving their real estate goals. One of the only real estate sites that have its' open house tab as well as a bookmark for foreclosures, a tab for rent-to-own, and one for auctions. </li> <li><a href="https://www.xome.com/">Xome</a> is the only platform that digitally relates all critical touchpoints along the real estate process. It makes the process of buying and selling a home more transparent for consumers by offering Status dashboards, Dynamic ratings of agents and real estate professionals, and Real-time property data. It acts as a broker providing qualified real estate agents and mortgage lenders. The platform allows you to buy, sell, find agents, receive houses via email, and take virtual tours of residences. The company also provides a real estate an auction platform with one of the largest real estate owned (REO), short sale, foreclosure, and luxury property auctions.</li> <li><a href="https://www.redfin.com/">Redfin</a> is a broker portal focused on providing real estate agents. They have sellers pay a 1 to 2% listing fee and commit to purchase within 365 days of closing. There is additional fees to compensate the brokerage representing the buyer usually in the 2.5 to 3.0% range, where buyers are given a small portion ( ~0.5%) of this fee by Redfin. The portal offers 3D tours of their home listings as well.</li> <li><a href="https://42floors.com/">42 Floors</a>: Online commercial real estate space marketplace</li> <li><a href="https://liquidspace.com/">LiquidSpace</a>: is an online marketplace and workspace network for renting office space.</li> <li><a href="https://www.roofstock.com/">Roofstock</a> provides online real estate services, including buying, selling, leasing, real estate investment, and property management services.</li> <li><a href="https://www.ahpfund.com/">American Homeowner Preservation</a> – uses capital to purchase distressed mortgages within the United States at massive discounts.</li> <li><a href="https://www.appearhere.co.uk/">Appear Here</a>: offers short-term space. The company's online platform allows landlords to list their space for free, for brands to book, like booking a hotel room.</li> </ol> <h2>Capitalize</h2> <p>Before investing in one of these portals we suggest you speak with a Chartered Financial Advisor. Our goal is to provide data and insights to reduce your fees, improve your access to innovative offerings so you can act on your own. With a low upfront cost of participation, real estate equity crowdfunding continues to grow into 2020. We believe the trend will further gain in popularity as the broader market begins to tighten. New and seasoned investors will have to do more with less to capitalize on fruitful returns that become harder to find.</p> <p>These platforms increase availability of information to investors and speculators alike. While the growth potential is attractive, investors need to tread cautiously. All investments worth your time and hard-earned cash will inherently present challenges and risks, producing the higher rates of return you desire.</p> <p><a href="/contact/">Reach out to us</a> if you have any questions and as usual let us know what you think in the comments below.</p> </div> <span rel="schema:author"><span lang="" about="/users/brian-thopsey" typeof="schema:Person" property="schema:name" datatype="">Brian Thopsey</span></span> <span property="schema:dateCreated" content="2020-07-05T09:32:35+00:00">Sun, 07/05/2020 - 05:32</span> <div class="field field--name-field-tags field--type-entity-reference field--label-hidden field__items"> <div property="schema:about" class="field__item"><a href="/tags/real-estate" hreflang="en">Real Estate</a>, <a href="/tags/capital-types" hreflang="en">Capital Types</a>, <a href="/tags/platforms" hreflang="en">Platforms</a>, <a href="/tags/non-accredited" hreflang="en">Non Accredited</a></div> </div> <div id="comment-section"> <div class="comment-number post-section-title"> <span> Comments</span> </div> <div class="title-line"></div> <div id="comment-container"> <div> <article class="comment byuser comment-author-admin bypostauthor even thread-even depth-1" id="li-comment-10"> <div class="comment-entry" > <div class="comment-avatar"> <article class="simpnews-user-info"> <div class="field field--name-user-picture field--type-image field--label-hidden field__item"> <a href="/user/0" hreflang="und"><img src="/sites/fundwisdom.com/files/styles/thumbnail/public/default_images/person_8x10.png?itok=5xxcXpg4" width="80" height="100" alt="Profile picture for user Robert" typeof="foaf:Image" /> </a> </div> </article></div> <div class="comment-info"> <div class="comment-author"> <span rel="schema:author"><span lang="" typeof="schema:Person" property="schema:name" datatype="">Pranam Lipinski (not verified)</span></span> </div> <div class="comment-date"> Sat, 03/06/2021 - 12:02 <span property="schema:dateCreated" content="2021-03-06T17:02:17+00:00" class="hidden"></span> </div> <span class="comment-reply"> <drupal-render-placeholder callback="comment.lazy_builders:renderLinks" arguments="0=157&amp;1=default&amp;2=en&amp;3=" token="Ac4yUScxu3gZ1nzRwzciIzWHfq6JsCQkIFbnYs9Y-2I"></drupal-render-placeholder> </span> <span class="comment-content"> </span> <div class="comment-content content"> <div property="schema:text" class="field field--name-comment-body field--type-text-long field--label-hidden field__item"><p>Very helpful and detailed! Thank you for this overview of really the future of real estate investing</p> </div> </div> </div> <div class="cleared"></div> </div> <!-- End Comment entry--> </article> </div> </div> <div class="cleared"></div> </div> Sun, 05 Jul 2020 09:32:35 +0000 Brian Thopsey 9907 at https://fundwisdom.com 2020 Q1 Equity Crowdfunding Contributions https://fundwisdom.com/article/brian-thopsey/2020-q1-equity-crowdfunding-contributions <span property="schema:name">2020 Q1 Equity Crowdfunding Contributions</span> <div property="schema:text" class="field field--name-body field--type-text-with-summary field--label-hidden field__item"><p>A majority of the population that was not able to invest in high growth private startup companies now can. If you were not aware it is likely due to the arduous restrictions in place, but <a href="https://www.sec.gov/news/press-release/2020-55">that may soon change</a>.</p> <p>Placing an accurate dollar amount on the total equity crowdfunding market has proven to be a challenge. At Fund Wisdom we have been collecting data on the industry, focusing primarily on the US, since 2014 in an effort to provide this type of insight. Through the years as we came across helpful sources of data we <a href="/investors/innovative-venture-reports">compiled a list of teams researching the market and the reports</a> they produce.</p> <p><a href="https://www.crowdcrux.com/equity-crowdfunding-in-2020/"><img src="/sites/fundwisdom.com/files/styles/max_650x650/public/2020-05/CrowdCrux%20Submission.JPG" style="width:400px;" class="autofloat-odd " /></a></p> <p>I recently had the pleasure of teaming up with Salvador Briggman to <a href="https://www.crowdcrux.com/equity-crowdfunding-in-2020/">publish an article on his site, Crowdcrux</a>. Crowdcrux is a powerful resource for those looking to raise money through crowdfunding websites across all genres like rewards, donations, and more. He has published several articles recently on guidance to achieve success with Kickstarter. As we completed the editing of our shared work I was notified by Dr. Daniel Johanson of the <a href="/investors/innovative-venture-reports/university-cambridge">University of Cambridge that they just produced their 2020 findings</a>.</p> <p>I am excited about the partnership to add unique insights across equity and crypto solutions to improve the investing and fund raising process. <a href="https://www.crowdcrux.com/equity-crowdfunding-in-2020/">Check out the article</a> and let us know what you think in the comments below.</p> </div> <span rel="schema:author"><span lang="" about="/users/brian-thopsey" typeof="schema:Person" property="schema:name" datatype="">Brian Thopsey</span></span> <span property="schema:dateCreated" content="2020-05-05T11:02:00+00:00">Tue, 05/05/2020 - 07:02</span> <div class="field field--name-field-tags field--type-entity-reference field--label-hidden field__items"> <div property="schema:about" class="field__item"><a href="/tags/analytics" hreflang="en">Analytics</a></div> </div> <div id="comment-section"> <div class="title-line"></div> <div id="comment-container"> <div> </div> </div> <div class="cleared"></div> </div> Tue, 05 May 2020 11:02:00 +0000 Brian Thopsey 9910 at https://fundwisdom.com https://fundwisdom.com/article/brian-thopsey/2020-q1-equity-crowdfunding-contributions#comments https://fundwisdom.com/article/brian-thopsey/2020-q1-equity-crowdfunding-contributions#comments SEC Proposals Likely to Increase Scrutiny of Reg CF Issuers https://fundwisdom.com/article/brian-thopsey/sec-proposals-likely-increase-scrutiny-reg-cf-issuers <span property="schema:name">SEC Proposals Likely to Increase Scrutiny of Reg CF Issuers</span> <div property="schema:text" class="field field--name-body field--type-text-with-summary field--label-hidden field__item"><p>The Securities and Exchange Commission proposed meaningful changes to a number of securities exemptions to facilitate easier capital raising for small issuers. As we shared in our <a href="/article/brian-thopsey/2020-q1-equity-crowdfunding-numbers">previous post on Q1 2020 update</a>, under these proposals, <strong>the capital raising limit for equity crowdfunding would be increased to $5 million</strong>, dramatically increasing the number of issuers who will find it appealing to raise capital through one of the regulated crowdfunding portals.  Doug Ellenoff, LawCloud’s Chairman, was active in promoting these changes and spoke in front of the Congressional Committee on Financial Services last Fall about these issues.</p> <p><a href="https://www.lawcloud.co/"><img alt="Law Cloud logo" src="/sites/fundwisdom.com/files/styles/medium/public/2020-04/lawcloud.jpg" class="autofloat-odd " /></a><br /> LawCloud believes that this exciting news and the anticipated surge of issuers relying on Reg CF and Reg A+ exemptions <strong>will result in heightened SEC scrutiny of disclosure filings within these spaces where non-compliance is currently commonplace</strong>.  Some issuers file their Form C with minimal risk disclosures or insufficient information for investors to make educated decisions.  Many issuers do not file Form C-U when their offering is completed and the lack of annual reporting is rampant for a filing that is critical for investors to remain up to date on the fundamentals of the company in which they have invested.  The lack of compliance of Reg CF issuers has caught the attention of some state’s Attorney Generals as well.  LawCloud remains the go-to platform for compliance as well as low costs for Reg CF issuers with its suite of products, which include Form C and annual report filing tools which are due at the end of April.</p> <p>At FundWisdom we see the other side of this in the <a href="/analytics">data we collect on the industry</a>. We see misspellings or other mistakes in filing forms that we pull together directly from the SEC filing database. We are not legal experts so definitely suggest consulting with one before raising money or it couldn't hurt to check in for review of investing docs. We have partnered with <a href="/investors/services/top-legal-tax-equity-crowdfunding">LawCloud and several other firms to offer legal services</a>.</p> <p>LawCloud is building out an array of offerings in the startup market not just in regulation crowdfunding. They recently released a Regulation A+ tool to assist law firms and issuers with producing draft documents at a tremendous savings versus the traditional path of using a law firm without technology. When we first started Fund Wisdom we leveraged local University legal centers for low, to no, cost help whereas if we knew of these offerings we would have leveraged them due to the deep expertise the team has built in the space.</p> <p>For a complete overview of the proposed changes, please see the article from <a data-saferedirecturl="https://www.google.com/url?q=https://www.crowdfundinsider.com/2020/03/158321-sec-proposes-raising-reg-cf-to-5-million-reg-a-to-75-million-adds-other-improvements-to-security-exemptions/&amp;source=gmail&amp;ust=1587464725660000&amp;usg=AFQjCNFThmEFSYqvANtNrR-LwyqEsl-z7A" href="https://www.crowdfundinsider.com/2020/03/158321-sec-proposes-raising-reg-cf-to-5-million-reg-a-to-75-million-adds-other-improvements-to-security-exemptions/" style="color:rgb(0,124,137)" target="_blank">Crowdfund Insider</a>. </p> </div> <span rel="schema:author"><span lang="" about="/users/brian-thopsey" typeof="schema:Person" property="schema:name" datatype="">Brian Thopsey</span></span> <span property="schema:dateCreated" content="2020-04-20T10:39:57+00:00">Mon, 04/20/2020 - 06:39</span> <div class="field field--name-field-tags field--type-entity-reference field--label-hidden field__items"> <div property="schema:about" class="field__item"><a href="/tags/legal" hreflang="en">Legal</a></div> </div> <div id="comment-section"> <div class="title-line"></div> <div id="comment-container"> <div> </div> </div> <div class="cleared"></div> </div> Mon, 20 Apr 2020 10:39:57 +0000 Brian Thopsey 9906 at https://fundwisdom.com https://fundwisdom.com/article/brian-thopsey/sec-proposals-likely-increase-scrutiny-reg-cf-issuers#comments https://fundwisdom.com/article/brian-thopsey/sec-proposals-likely-increase-scrutiny-reg-cf-issuers#comments Build a Venture Fund, Reduce Overhead https://fundwisdom.com/article/brian-thopsey/build-venture-fund-reduce-overhead <span property="schema:name">Build a Venture Fund, Reduce Overhead</span> <div property="schema:text" class="field field--name-body field--type-text-with-summary field--label-hidden field__item"><p style="margin: 0in 0in 8pt;">Looking to grow your portfolio and team up with other investors to build a new fund? If you are an accredited investor you can leverage a number of <a href="/investors/platforms">equity funding platforms we cover</a> build your own fund. In an effort to compete and scale we have seen these platforms offer reduced overhead costs. This translates to lower fees for you. These investing portals built the infrastructure with innovative approaches to scaling legal and back office administration. As the amount of capital invested in these platforms grow so too does the impact this will have on the overall industry.</p> <p style="margin: 0in 0in 8pt;">As the author I am not an accredited investor myself but believe this infrastructure is soon to come to non-accredited investors like myself.</p> <p><a href="/investors/funds"><img alt="Republic Autopilot, AngelList Syndicates, other Funds " data-entity-type="file" data-entity-uuid="3236c0ae-428b-454d-b017-23ad3c8b4320" src="/sites/fundwisdom.com/files/inline-images/funds-screencap.JPG" style="width:750px;" class="autofloat-odd " /></a></p> <h2 style="margin: 0in 0in 8pt;">AngelList Syndicates</h2> <p style="margin:0in 0in 8pt"><a href="/platform/angellist">AngelList </a>syndicate investing provides infrastructure similar to a venture fund. Simply put if you feel like getting in early and improving the amount of capital behind your investments syndicates are the way to go.</p> <p style="margin:0in 0in 8pt">Christian Catalini of MIT Sloan explains syndicates:</p> <p><iframe allow="autoplay; encrypted-media" allowfullscreen="" frameborder="0" height="315" src="https://www.youtube.com/embed/pjtW_fq-rB8" width="560"></iframe></p> <h3>Fee Reduction</h3> <p><img alt="" data-entity-type="" data-entity-uuid="" src="/sites/all/files/cfund//angellist_syndicate_fees.png" style="margin: 10px;" width="250" class="autofloat-even " /></p> <p><span style="font-size:11pt"><span style="line-height:107%"><span style="font-family:&quot;Calibri&quot;,sans-serif"><span lang="EN-CA" style="font-size:12.0pt" xml:lang="EN-CA"><span style="line-height:107%">Historically the 2/20 fee model was fairly standard. This structure results in 2% fee for the overall assets managed and 20% for the carried interest, or positive returns. A syndicate allows investors to participate as a lead investor or a follow on to the lead in exchange for the the lead's carried interest. Carry, short for carried interest, or a share of the profits of an investment that is paid to the managers of the investment. </span></span></span></span></span>Syndicates eliminate management fees leaving more capital for investment. On average, syndicates invest 97% of the capital they raise. This chart was a break down of the fees back when AngelList made the data public via API.</p> <h3>Access to Rising Star Fund Managers</h3> <p><a href="https://angel.co/2019"><img src="/sites/fundwisdom.com/files/styles/max_650x650/public/2020-04/angelList-overall-2019.JPG" style="width:300px;float:left;margin:10px;" class="autofloat-odd " /> </a></p> <p>The Syndicate allows a lead investor to create a fund-like structure to have Backers similar to Limited Partners. An individual can create their own or join others. We wrote an in depth article on <a href="/article/brian-thopsey/reducing-overhead-fund-creation-angellist-syndicates">how to do this</a>. AngelList also wrote an in depth piece on the <a href="https://angel.co/economics-syndicates">economics of Syndicates</a>.</p> <p>As example a lead can have 40 investors with just one signatory on an investment, which helps keep the cap table clean. The syndicates provide pro-rata rights to invest in subsequent rounds. It packages and aggregates angel money into large bundles making it easier for angels to attain rights they might not otherwise have.</p> <p>One of the major attractions and benefits of syndicates are the deal access that investors receive. Investors get access to a lead’s investments and to the leads professional knowledge and experience. Syndicate Investors get access to fantastic opportunities and exciting deals, leads get carry while start-ups receive vital capital with less hang-ups and cutting down the time involved with the process. It’s a Win-Win for everyone involved.</p> <p>With AngelList you can chose to invest directly into a particular company, or join a syndicate where you can reduce your risk profile by investing alongside a lead into a group of pre-selected companies. Investors get access to a lead’s investments, therefore their due diligence, and subsequently they receive great benefit from the leads experience in the sector as well as their picking and managing of investments.</p> <h3 style="margin: 0in 0in 8pt;">Greater Access to Capital</h3> <p style="margin:0in 0in 8pt"><span style="font-size:11pt"><span style="line-height:107%"><span style="font-family:&quot;Calibri&quot;,sans-serif"><span lang="EN-CA" style="font-size:12.0pt" xml:lang="EN-CA"><span style="line-height:107%">The lead can command 5 - 10x their typical investment dollar amount. Leads can leverage this increased investment amount, giving them access to more deals. It is also possible that the lead can improve their syndicate's investor rights. A lead can enhance their </span></span></span></span></span><span style="font-size:11pt"><span style="line-height:107%"><span style="font-family:&quot;Calibri&quot;,sans-serif"><span lang="EN-CA" style="font-size:12.0pt" xml:lang="EN-CA"><span style="line-height:107%">brand as a fund manager. With AngelList leads gain access to a network of potential co-investors who can be experts in a broad range of industries.</span></span></span></span></span></p> <p style="margin:0in 0in 8pt"><span style="font-size:11pt"><span style="line-height:107%"><span style="font-family:&quot;Calibri&quot;,sans-serif"><span lang="EN-CA" style="font-size:12.0pt" xml:lang="EN-CA"><span style="line-height:107%">And of course the start-up gets the benefit of a lead that makes a large investment along with providing direct access to a diversified and knowledgeable syndicate investor’s network without having to endure lengthy legal proceedings and complexity in their cap table.</span></span></span></span></span><span style="font-size:11pt"><span style="line-height:107%"><span style="font-family:&quot;Calibri&quot;,sans-serif"><span lang="EN-CA" style="font-size:12.0pt" xml:lang="EN-CA"><span style="line-height:107%"> </span></span></span></span></span></p> <h3>Creating a Syndicate</h3> <p>In order to create a syndicate you will have to join and create a profile at <a href="https://angel.co/">angel.co</a>. Once your profile has been created enter information about how many deals you expect to syndicate each year. Commitments start after you syndicate your first deal.</p> <ul> <li>Make a significant investment in each deal</li> <li>Provide an investment thesis for each deal</li> <li>Disclose potential conflicts of interest such as warrants</li> <li>Review and screen potential investors in each deal</li> <li>Sign a side letter making you an independent contractor of AngelList Advisors</li> <li>Respond to questions from syndicate investors about their investments</li> </ul> <p style="margin:0in 0in 8pt"><span style="font-size:11pt"><span style="line-height:107%"><span style="font-family:&quot;Calibri&quot;,sans-serif"><span lang="EN-CA" style="font-size:12.0pt" xml:lang="EN-CA"><span style="line-height:107%">Syndicate investors have to be accredited. The fundraising information for a syndicate deal is only visible to accredited investors who have been invited to participate in the deal; the start-up can limit the information as well as exclude certain investors from observing the deal all together.</span></span></span></span></span></p> <ul> <li>Discuss terms with the lead</li> <li>Share information on the raise in a private deal setting</li> <li>Invite investors – <a href="https://blog.angel.co/announcing-400m-for-startups-on-angellist-d17193cee9d">AngelList affiliated funds</a> are under NDA and are automatically invited to invest in all deals.</li> <li>Closing the deal – deals can be closed in as quickly as 72 hours.</li> </ul> <p>The <a href="/platform/angellist">AngelList </a>and <a href="/funds/accomplice">Accomplice </a>teams created <a href="http://www.spearhead.co/">Spearhead, </a> a platform that helps founders become angel investors with $200K, mentorship, and the potential for up to $1M to invest.</p> <h3>Tax Advantaged Funds and Accounts</h3> <p><a href="/media/2029/edit"><img alt="Rocketdollar invest" sizes="(min-width: 1290px) 325px, (min-width: 851px) 25vw, (min-width: 560px) 50vw, 100vw" src="/sites/fundwisdom.com/files/styles/max_325x325/public/2020-03/rocketdollar.PNG?itok=wCeIkyCL" srcset="/sites/fundwisdom.com/files/styles/max_325x325/public/2020-03/rocketdollar.PNG?itok=wCeIkyCL 325w, /sites/fundwisdom.com/files/styles/max_650x650/public/2020-03/rocketdollar.PNG?itok=fbmAoJsH 650w, /sites/fundwisdom.com/files/styles/max_1300x1300/public/2020-03/rocketdollar.PNG?itok=RZwDumgf 1300w" typeof="foaf:Image" class="autofloat-even " /></a> We started to partner with<a href="http://www.rocketdollar.com?utm_campaign=Fund%20Wisdom&amp;utm_source=Fund%20Wisdom&amp;utm_medium=Affiliates"> RocketDollar via their Self Directed IRA and 401k product offerings. </a><span class="hs_cos_wrapper hs_cos_wrapper_widget_container hs_cos_wrapper_type_widget_container" data-hs-cos-general-type="widget_container" data-hs-cos-type="widget_container" id="hs_cos_wrapper_module_140190329510711990" style="">A self-directed account holder can invest in any asset class allowed by the IRS which includes startup equity. </span><span class="hs_cos_wrapper hs_cos_wrapper_widget_container hs_cos_wrapper_type_widget_container" data-hs-cos-general-type="widget_container" data-hs-cos-type="widget_container" id="hs_cos_wrapper_module_1550611252307123" style="">With a Traditional IRA, you can make contributions and your investment earnings grow tax deferred until retirement. This plan is easy to qualify for and ideal for most individuals.</span></p> <article class="align-left"> <div class="field field--name-field-media-image field--type-image field--label-visually_hidden" data-quickedit-field-id="media/2029/field_media_image/en/default"> <div class="field__label visually-hidden">Image:</div> <div class="field__item"> </div> </div> </article> <p> </p> <h2>Conclusion</h2> <p> AngelList is not the only equity funding portal to offer fund creation as can be seen in the title image <a href="/investors/funds">many others have built similar solutions</a>. We hope you find this helpful and are able to build your own fund on one of these platforms. Let us know about your experiences or feedback in the comments below.</p> </div> <span rel="schema:author"><span lang="" about="/users/brian-thopsey" typeof="schema:Person" property="schema:name" datatype="">Brian Thopsey</span></span> <span property="schema:dateCreated" content="2020-04-09T09:15:46+00:00">Thu, 04/09/2020 - 05:15</span> <div class="field field--name-field-tags field--type-entity-reference field--label-hidden field__items"> <div property="schema:about" class="field__item"><a href="/tags/platforms" hreflang="en">Platforms</a>, <a href="/tags/raise-capital" hreflang="en">Raise Capital</a></div> </div> <div id="comment-section"> <div class="title-line"></div> <div id="comment-container"> <div> </div> </div> <div class="cleared"></div> </div> Thu, 09 Apr 2020 09:15:46 +0000 Brian Thopsey 5737 at https://fundwisdom.com Zone In - Investing Opportunity on Real Estate Platforms https://fundwisdom.com/article/brian-thopsey/zone-investing-opportunity-real-estate-platforms <span property="schema:name">Zone In - Investing Opportunity on Real Estate Platforms</span> <div property="schema:text" class="field field--name-body field--type-text-with-summary field--label-hidden field__item"><p>If you are interested in real estate investing innovative platforms can provide access to higher yielding interest income than traditional brokers. New technologies and regulations have made way to source these higher yielding securities, one in particular being opportunity zones with tax incentives. You can defer capital gains through opportunity zone properties. If you are willing and able to take a long-term investment approach you can get this incentive through qualified opportunity funds (QOF).</p> <div style="width:520px;float:right;"><img alt="Commercial Real Estate " data-entity-type="file" data-entity-uuid="a470dd37-86b8-413f-ae5d-feae3e3b6578" src="/sites/fundwisdom.com/files/inline-images/smallerbuilding1.jpg" width="500px;" class="autofloat-odd " /></div> <p> In part 1 of this series <a href="/article/brian-thopsey/capitalize-real-estate-investing-platforms">we explain the market</a>, in part 2 <a href="/article/brian-thopsey/top-real-estate-investing-portals">we provide a list of top platforms</a>, and here we go into detail on the incentive programs and where to find them. </p> <h2>Alternative Investment Platforms: Real Estate</h2> <p>Real estate lending platforms apply due diligence to find strong loans. They use filters, algorithms, and data analytics to select specific loans. They screen loans for a favorable Loan to Value ratio. In real estate finance, properties with a high equity balance (property value exceeds loan balance) have a desirable lower Loan to Value ratio. Loans can be offered as private debt secured by real estate assets. To help you mitigate the risk of losses, find first loans with seniority in the event of a borrower’s foreclosure (not riskier second loan financing).</p> <p><a href="/investors/platforms">Funding platforms</a> offer, and focus on, different investment classes like debt and equity. Debt investors are lenders, and have different ownership rights in the property than equity holders. Equity investing provides ownership or shareholding rights of a property, but holding periods can be shorter for debt. Shareholders can be rewarded through retained earnings with a downside of a risk of default by the team raising the money. An equity investment has a claim on the assets of the fund after the debt holders. Convertible debt is a loan that can convert to equity under certain conditions. It's a hybrid security with debt and equity-like features.</p> <p>We continue to see <a href="/search/node?keys=real%20estate&amp;f%5B0%5D=type%3Acompany&amp;advanced-form=1">equity offerings for real estate on the equity funding focused platforms we cover</a>. Due to rapid development of of these funding portals and technology shifts we expect to see greater investment in real estate offerings over high growth business equity offerings, which we focus on.</p> <h2>What are Opportunity Zones and QOFs?</h2> <p>The Tax Cuts and Jobs Act (TCJA), enacted in December 2017, creates opportunity zone investing incentives. The intent is “to spur economic development and job creation in distressed communities throughout the country and U.S. possessions by providing tax benefits to investors who invest eligible capital into these communities. Taxpayers may defer tax on eligible capital gains by making an appropriate investment in a Qualified Opportunity Fund and meeting other requirements”, according to the IRS. An <a href="https://www.irs.gov/newsroom/opportunity-zones-frequently-asked-questions">IRS FAQ </a>explains the concept in detail and includes a link to find available opportunity zone parcels. A percentage of capital gains rolled over within 180 days is deferred. The percent depends on the number of years an opportunity zone property investment is held.</p> <p>Qualified opportunity zone property investing is almost as good a gift as the 1031 real estate exchange. 1031 defers income taxes on gains from qualifying real estate sales. To prevent being caught starkers (defined as naked in the Urban Dictionary), read on. Limiting your knowledge could be a risky option.</p> <p>Does this add another level of diversification to portfolio investments, reducing risk?  Think about it from the view of an investment overlay manager. Consider your portfolio investments held at different sources. Decide whether you would be meeting your portfolio diversification objectives either yourself or with a Chartered Financial Advisor.</p> <h2>Source Opportunity Zone Property</h2> <p style="margin-bottom:11px">Fundrise, Wells Fargo and Preqin are helpful resources to find these investments.  Fundrise ranks “<a href="https://fundrise.com/education/blog-posts/the-top-10-opportunity-zones-in-the-united-states?utm_source=google&amp;utm_medium=cpc&amp;utm_content=text-%2Bopportunity%20%2Bzone-b-ozoneinvesting&amp;utm_campaign=search-marketbuilding_opportunity_fundphrase-usa-20190418&amp;gclid=EAIaIQobChMI8b7kvar74QIVSrzACh38Egs7EAAYAyACEgI4F_D_BwE">The Top 10 Opportunity Zones in the US</a>”.  Wells Fargo Bank is a leader in reconstruction loans. It addresses qualified opportunity zones in a <a href="https://www.wellsfargo.com/the-private-bank/insights/planning/wpu-qualified-opportunity-zones/">wealth planning update article</a>. Existing properties must include eligible improvements equal to the original investment amount. These property improvements impact both sides of the loan to value ratio.  Preqin reports the status of qualified opportunity zone funds (QOFs) investing in <a href="https://www.preqin.com/insights/blogs/investors-are-zoning-out-on-opportunity-zone-funds/26497">insight articles</a>. Preqin’s report, “Opportunity Zone Funds: Investors Waiting in the Wings”, presents survey statistics.<br />  </p> <ul> </ul> <h2>What is Next?</h2> <p style="margin-bottom:11px">Real estate investment platforms provide portfolio diversification. Some online platforms help source qualified opportunity zone properties and we expect more to follow. At Fund Wisdom we have focused on alternative investing platforms offering equity in startup companies. We showcase <a href="/article/brian-thopsey/top-10-equity-crowdfunding-portals-2019">ratings, data,</a> and <a href="/investors/companies">investment offerings</a> <a href="/investors/platforms">across a set of vetted platforms</a>. We have observed a rise in real estate being offered on these platforms. With this rise we have begun to expand our research into real estate. Since we do not specialize in this space we still have some questions about the opportunity at hand:</p> <ul> <li>Would lenders on QOF fund real estate loans want to resell those loans directly to real estate lending platforms?</li> <li>If yes, is there a financial incentive for the QOF’s involvement?</li> <li>Can it find information on the existing lender without involving the QOF?</li> <li>Would including qualified opportunity zone property loans improve opportunities for debt investors?</li> <li>Is risk mitigated or increased for investors?</li> <li>QOF investors are long-term investors in the property. Value increases with renovations, proper maintenance, and increased economic prosperity in the community.</li> </ul> <p>Let us know your thoughts in the comments below.</p> </div> <span rel="schema:author"><span lang="" about="/users/brian-thopsey" typeof="schema:Person" property="schema:name" datatype="">Brian Thopsey</span></span> <span property="schema:dateCreated" content="2019-12-01T23:56:37+00:00">Sun, 12/01/2019 - 18:56</span> <div class="field field--name-field-tags field--type-entity-reference field--label-hidden field__items"> <div property="schema:about" class="field__item"><a href="/tags/real-estate" hreflang="en">Real Estate</a>, <a href="/tags/non-accredited" hreflang="en">Non Accredited</a></div> </div> <div id="comment-section"> <div class="title-line"></div> <div id="comment-container"> <div> </div> </div> <div class="cleared"></div> </div> Sun, 01 Dec 2019 23:56:37 +0000 Brian Thopsey 9455 at https://fundwisdom.com https://fundwisdom.com/article/brian-thopsey/zone-investing-opportunity-real-estate-platforms#comments https://fundwisdom.com/article/brian-thopsey/zone-investing-opportunity-real-estate-platforms#comments