Fintech Articles - Fundwisdom.com https://fundwisdom.com/ en 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> <p> </p> <p><img src="/sites/fundwisdom.com/files/styles/max_1300x1300/public/2020-04/patrick-tomasso-nApljhT9kfM-unsplash.jpg" style="float:right;margin:10px;width:400px;" class="autofloat-odd " /></p> <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">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="http://www.anrdoezrs.net/click-7643827-13176233" 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. <a href="https://www.kqzyfj.com/click-7643827-12993288" tabindex="-1" target="_top"><img alt="Real Estate Investing Platform" border="0" class="autofloat-even autofloat-odd " height="120" src="https://www.ftjcfx.com/image-7643827-12993288" width="240" /></a> 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.</li> <li><a href="https://www.realtymogul.com/">RealtyMogul</a> raised $45 million and transacted $2 billion. They operate as an online marketplace for real estate investment. The platform enables investment in real estate investments that have already been <a href="https://www.realtymogul.com/knowledge-center/due-diligence">evaluated via their due diligence team</a>. 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.</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.groundfloor.us/">Groundfloor</a> raised $38 million and shares 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+; the market is also open to non-accredited investors. Type of asset: developments. Real estate asset class: residential land.</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/acq-plus/start?utm_campaign=impactradius&amp;irgwc=1&amp;utm_medium=cpa&amp;utm_source=moneycheck&amp;clickid=VQXS01zZLxyOWPQwUx0Mo38XUknTz5yFUUfpVU0">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://www.crowdstreet.com/join/now/?irclickid=0pXW3dz%3AMxyOTYYwUx0Mo3chUknTzYSpUUfpVU0&amp;irgwc=1&amp;utm_source=impact-radius&amp;utm_campaign=Passive%20Income%20M.D.&amp;utm_medium=mediapartner&amp;utm_content=ONLINE_TRACKING_LINK&amp;utm_term=Online%20Tracking%20Link">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.</p> </li> <li> <p><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.</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"><a title="View user profile." href="/users/brian-thopsey" lang="" about="/users/brian-thopsey" typeof="schema:Person" property="schema:name" datatype="">Brian Thopsey</a></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/capital-types" hreflang="en">Capital Types</a>, <a href="/tags/platforms" hreflang="en">Platforms</a>, <a href="/tags/retail-investors" hreflang="en">Retail Investors</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, 05 Jul 2020 09:32:35 +0000 Brian Thopsey 9907 at https://fundwisdom.com https://fundwisdom.com/article/brian-thopsey/top-real-estate-investing-portals#comments https://fundwisdom.com/article/brian-thopsey/top-real-estate-investing-portals#comments 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>Investing in Alternative Assets can produce impressive returns, but with those returns comes risks and regulatory challenges. In order to profit from investments in early stage equity and coin offerings, strategies to lower risk and ensure compliance are imperative. We cover firms offering due diligence, diversification, and insurance both directly to you and as an added service to the investing portals.</p> <p><img src="/sites/fundwisdom.com/files/styles/max_325x325/public/2020-07/nature-water-eyes-pond-45863.jpg" class="autofloat-odd " /></p> <h2>Innovations and Risks</h2> <p>Likely the reason you are here reading this is that you are more of a risk taker and willing to potentially lose what you put in at the chance of incredible returns in alternatives and venture investing.  </p> <p>Changing regulations and innovations like blockchain, cryptocurrencies, investing portals are opening access to equity investments. This is creating incredible opportunities to create wealth. Historically only accredited investors were allowed to invest in venture investment offerings, <a href="/crowdfunding-investors/crowdfunding-non-accredited-investors" tabindex="-1">which we explain 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> <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 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> <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>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"><a title="View user profile." href="/users/brian-thopsey" lang="" about="/users/brian-thopsey" typeof="schema:Person" property="schema:name" datatype="">Brian Thopsey</a></span> <span property="schema:dateCreated" content="2020-07-05T01:57:13+00:00">Sat, 07/04/2020 - 21:57</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/retail-investors" hreflang="en">Retail Investors</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> Sun, 05 Jul 2020 01:57:13 +0000 Brian Thopsey 5676 at https://fundwisdom.com https://fundwisdom.com/article/brian-thopsey/reducing-risk-equity-investing-portals#comments https://fundwisdom.com/article/brian-thopsey/reducing-risk-equity-investing-portals#comments 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"><a title="View user profile." href="/users/brian-thopsey" lang="" about="/users/brian-thopsey" typeof="schema:Person" property="schema:name" datatype="">Brian Thopsey</a></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"><a title="View user profile." href="/users/brian-thopsey" lang="" about="/users/brian-thopsey" typeof="schema:Person" property="schema:name" datatype="">Brian Thopsey</a></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 angel portfolio and team up with other investors to build a new fund? We have observed a number of <a href="/investors/platforms">equity funding platforms we cover</a> build the infrastructure to allow you to build your own fund. In an effort to compete and scale we have seen reduced overhead and fees for building these funds. They are able to achieve this with innovative approaches to scaling legal and back office. 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;"> </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> <p> </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"><a title="View user profile." href="/users/brian-thopsey" lang="" about="/users/brian-thopsey" typeof="schema:Person" property="schema:name" datatype="">Brian Thopsey</a></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 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. 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 currently no central market to view every single offering available. 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><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.</p> <p>Equity crowdfunding is essentially an investment arrangement. We define investing portals focused on accredited investors and equity crowdfunding portals focused on non-accredited. 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>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>We hope the early stage growth company you invest in will reach an initial public offering or you are able to achieve returns through an acquisition. We look forward to hearing about your experience in the comments section below or contact form.</p> </div> <span rel="schema:author"><a title="View user profile." href="/users/brian-thopsey" lang="" about="/users/brian-thopsey" typeof="schema:Person" property="schema:name" datatype="">Brian Thopsey</a></span> <span property="schema:dateCreated" content="2020-04-05T11:35:59+00:00">Sun, 04/05/2020 - 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/retail-investors" hreflang="en">Retail Investors</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 Jhonson" 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"><a title="View user profile." href="/users/brian-thopsey" lang="" about="/users/brian-thopsey" typeof="schema:Person" property="schema:name" datatype="">Brian Thopsey</a></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> Sun, 05 Apr 2020 11:35:59 +0000 Brian Thopsey 6776 at https://fundwisdom.com https://fundwisdom.com/article/brian-thopsey/how-invest-equity-crowdfunding-portals#comments https://fundwisdom.com/article/brian-thopsey/how-invest-equity-crowdfunding-portals#comments 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><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-odd " /></p> <p>This is a 2 part series, <a href="/article/brian-thopsey/top-real-estate-investing-portals">Jump to the 2nd part &gt;</a></p> <p>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> <p>At Fund Wisdom we focus on <a href="/investors/platforms">funding portals that offer equity in startup companies.</a> As the equity crowdfunding industry grows we've observed a commensurate growth in real estate offerings. We have observed correlations between equity crowdfunding real estate platforms and online real estate portals that indicate a symbiotic relationship, with each type of platform looking to achieve positive returns via enhanced research and risk management. 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> <p> </p> <h2> </h2> <h2>Crowdfunding Real Estate Innovation</h2> <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 $9.7 trillion, of the growth in value of the U.S. housing stock over the past decade can be attributed to the simple, steady appreciation of existing homes over this period. The remainder can be chalked up to builders adding value to the housing stock through newly built homes. In almost every individual market, a similar pattern holds true – the majority of overall housing value growth can be attributed to appreciation." Appreciation is an increase in the value of an asset over time driven by demand, weakening supply, inflation or interest rates and the reason to invest in the asset class.</p> <h3><a href="https://www.ey.com/Publication/vwLUAssets/Real_Estate_Crowdfunding/$FILE/EY-Real%20Estate%20Crowdfunding-March%202019.pdf"><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-even " /></a>Crowdfunding Market Size &amp; Growth</h3> <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>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"><a title="View user profile." href="/users/brian-thopsey" lang="" about="/users/brian-thopsey" typeof="schema:Person" property="schema:name" datatype="">Brian Thopsey</a></span> <span property="schema:dateCreated" content="2020-03-09T00:39:14+00:00">Sun, 03/08/2020 - 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/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, 09 Mar 2020 00:39:14 +0000 Brian Thopsey 9691 at https://fundwisdom.com https://fundwisdom.com/article/brian-thopsey/capitalize-real-estate-investing-platforms#comments https://fundwisdom.com/article/brian-thopsey/capitalize-real-estate-investing-platforms#comments Zone In - Interesting Opportunity on Real Estate Lending Platforms https://fundwisdom.com/article/brian-thopsey/zone-interesting-opportunity-real-estate-lending-platforms <span property="schema:name">Zone In - Interesting Opportunity on Real Estate Lending Platforms</span> <div property="schema:text" class="field field--name-body field--type-text-with-summary field--label-hidden field__item"><p>Innovative digital real estate investment platforms provide access to higher yielding interest income than what can be accessed through traditional brokers. Within this market further opportunity has arisen through Tax Cuts and the Jobs Act (TCJA) allowing investors to defer capital gains through investments in opportunity zone properties. The long-term investments are made through qualified opportunity funds (QOF).</p> <p>At Fund Wisdom we have primarily focused on alternative investing through equity focused portals, <a href="/article/brian-thopsey/top-10-equity-crowdfunding-portals-2019">rating, showcasing 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 and have begun to expand our research into the real estate asset class where I look to share the opportunities we have uncovered. </p> <h2>What are Alternative Asset Real Estate Platform Investments?</h2> <p>Real estate investment platforms provide several structures of loan offerings. These loans are 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>Real estate lending platforms apply due diligence to find strong loans. They use filters, algorithms, and data analytics to select specific loans. <a href="http://www.anrdoezrs.net/click-7643827-13176233" target="_top">PeerStreet </a>and others 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.</p> <p><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 " /></p> <h2>Real Estate Investment Lending Platforms</h2> <p>Our initial list includes both commercial and residential real estate loan platforms. Some platforms offer real estate equity through investment in real estate properties.</p> <ul><li><a href="https://www.alphaflow.com/">AlphaFlow</a></li> <li><a href="https://www.equitymultiple.com/">EquityMultiple</a> offers equity investments in opportunity zone properties</li> <li><a href="https://fundrise.com/">Fundrise</a> </li> <li><a href="https://www.fundthatflip.com/">Fund That Flip</a></li> <li><a href="https://www.groundfloor.us/">Groundfloor</a></li> <li><a href="https://www.lendinghome.com/">LendingHome</a>  a hard money lender</li> <li><a href="https://patchofland.com/">Patch of Land</a></li> <li><a href="http://www.anrdoezrs.net/click-7643827-13176233" target="_top">PeerStreet</a></li> <li><a href="https://www.pmifunds.com/funds-2/real-estate-lending-fund/">Prime Meridian Capital Management</a> – Real Estate Lending Fund</li> <li><a href="https://www.sharestates.com/">Sharestates</a></li> </ul><p> </p> <h2>Must investors be accredited to use real estate lending platforms?</h2> <p style="margin-bottom:11px"><span style="font-size:11pt"><span style="line-height:200%"><span style="font-family:&quot;Calibri&quot;,sans-serif"><span style="font-family:&quot;Arial&quot;,sans-serif">To answer this question, let’s review the definitions, then zero in on the current debate.</span></span></span></span></p> <h3>SEC rules for exempt companies</h3> <p>The Securities and Exchange Commission (SEC) decides whether investors must be accredited. If the real estate debt or other securities aren’t registered with the SEC, the company may be exempt under Rule 506 of Regulation D or another exemption. Exempt companies are restricted to accredited investors.</p> <h3>Accredited investors</h3> <p>The SEC defines the criteria in its "<a href="https://www.investor.gov/additional-resources/news-alerts/alerts-bulletins/updated-investor-bulletin-accredited-investors">Updated Investor Bulletin - Accredited Investors</a>." The bulletin describes these sophisticated individuals who can withstand a financial loss. The Federal government agency also defines other types of accredited investors.</p> <p><span style="font-size:11pt"><span style="line-height:200%"><span style="font-family:&quot;Calibri&quot;,sans-serif"><span style="font-family:&quot;Arial&quot;,sans-serif">“An <i>accredited investor</i>, in the context of a <i>natural person</i>, includes anyone who:</span></span></span></span></p> <ul><li style="margin-bottom:11px"><span style="font-size:11pt"><span style="line-height:normal"><span style="tab-stops:list .75in"><span style="font-family:&quot;Calibri&quot;,sans-serif"><span style="font-family:&quot;Arial&quot;,sans-serif">earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expects the same for the current year, <b><i>OR</i></b></span></span></span></span></span></li> <li style="margin-bottom:11px"><span style="font-size:11pt"><span style="line-height:normal"><span style="tab-stops:list .75in"><span style="font-family:&quot;Calibri&quot;,sans-serif"><span style="font-family:&quot;Arial&quot;,sans-serif">has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence).”</span></span></span></span></span></li> </ul><h3>Non-accredited investors</h3> <p>Non-accredited investors don’t meet the criteria. The 2012 Jumpstart Our Business   Startups (JOBS) Act offers them different crowdfunding opportunities.</p> <h3>The debate about lending platform investors</h3> <p>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. The riskier real estate lending platform, Groundfloor, includes non-accredited investors.</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>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>”.</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>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.</p> <p>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.</p> <p> </p> <h2>Platforms providing filters for opportunity zone properties</h2> <p style="margin-bottom:11px"><span style="font-size:11pt"><span style="line-height:200%"><span style="font-family:&quot;Calibri&quot;,sans-serif"><span style="font-family:&quot;Arial&quot;,sans-serif">The idea of overlaying census tract numbers of opportunity zone properties raises some questions:</span></span></span></span></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>Or does the real estate loan investing platform look up the census tract directly?</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? <ul><li>QOF investors are long-term investors in the property. Value increases with renovations, proper maintenance, and increased economic prosperity in the community.</li> <li>Does this add another level of diversification to portfolio investments, reducing risk? <ul><li>Think about it from the view of an investment overlay manager.</li> <li>Consider your portfolio investments held at different sources.</li> <li>Decide whether you would be meeting your portfolio diversification objectives.</li> </ul></li> </ul></li> </ul><h2>Takeaway</h2> <p>Real estate lending investment platforms provide portfolio diversification. Some online platforms like EquityMultiple allow investors to invest in qualified opportunity zone properties and we expect more to follow. Should the loans on those properties should be offered as investments is an open question. Let us know your thoughts in the comments below.</p> </div> <span rel="schema:author"><a title="View user profile." href="/users/brian-thopsey" lang="" about="/users/brian-thopsey" typeof="schema:Person" property="schema:name" datatype="">Brian Thopsey</a></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/capital-types" hreflang="en">Capital Types</a>, <a href="/tags/retail-investors" hreflang="en">Retail Investors</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-interesting-opportunity-real-estate-lending-platforms#comments https://fundwisdom.com/article/brian-thopsey/zone-interesting-opportunity-real-estate-lending-platforms#comments Angel Portfolio Management https://fundwisdom.com/article/brian-thopsey/angel-portfolio-management <span property="schema:name">Angel Portfolio Management</span> <div property="schema:text" class="field field--name-body field--type-text-with-summary field--label-hidden field__item"><p>Many early stage investors start tracking in spreadsheets or accounting systems, but these often fall short for providing real time actionable insight. Complexity has increased as asset structures have evolved making these systems antiquated. Fintech firms like Personal Capital, Addepar, Mint have grown in popularity helping individuals manage their portfolio of investments. These solutions simplify portfolio performance and personal finance. The world of alternative investing in private equity has seen a growing number of companies applying these same principles to create helpful services offerings for investors like you.</p> <h2>Offerings</h2> <p> </p> <p><a href="/investors/portfolio-system"><img alt="Portfolio offering logos" data-entity-type="file" data-entity-uuid="656f0688-1ff6-4714-a332-f9c6213505c1" src="/sites/fundwisdom.com/files/inline-images/Portfolio%20offerings.png" class="autofloat-odd " /></a></p> <p>We review a <a href="/investors/portfolio-system">set of portfolio and asset management solutions that specialize in alternative assets and startup equity</a>. We will continue to add offerings and further detail on each to help you select the right solution for your needs. In this article we go into detail on two that we have become most familiar with.</p> <h3>Addepar</h3> <p>Investment management platform <a href="https://www.addepar.com/">Addepar</a> was started with the goal of providing clarity into investment options along with an actionable interface. A New York Times <a href="http://www.nytimes.com/2014/08/04/technology/wealth-managers-enlist-spy-tools-to-map-portfolios.html?_r=1">article</a> points out, this company is doing its part to help wealth managers weave through the complex web of big data to analyze their portfolios. Addepar offers investors and advisors a way to quickly and accurately get a snapshot of their holdings, while funds and fund administrators can seamlessly tailor their analysis and reporting.</p> <p>Addepar was founded by two former employees of Palantir Technologies, a firm that helps military and intelligence agencies sort through complex data. While the big data involved in the world of investing is different from matters of national or international security, parallels can be drawn. Much in the way data can help security experts prepare for disaster scenarios, Addepar can do the same for portfolio's and throw up red flags if a portfolio appears headed for doomsday. Eric Poirier, Addepar's CEO, explained to the New York Times some of the problems confronting today's wealth managers and investors. "One of the most fundamental questions in finance is 'What do I own, and what is all of this worth?' 'What is my risk?' turns out to be an almost intractable problem," Poirier <a href="http://www.nytimes.com/2014/08/04/technology/wealth-managers-enlist-spy-tools-to-map-portfolios.html?_r=1">said</a>. This offering is very robust trying to fit the needs of many different investors. For a more focused angel portfolio offering we looked at Seraf Investor.</p> <h3>Seraf Investor</h3> <p><a href="https://seraf-investor.com"><img alt="" data-entity-type="" data-entity-uuid="" height="327" src="/sites/all/files/cfund//seraf_investing.jpg" style="margin: 10px 20px;" width="407" class="autofloat-even " /></a></p> <p><a href="https://seraf-investor.com">Seraf Investor</a> was built by Co-Founders Ham Lord &amp; Christopher Mirabile Co-Managing Directors of Launchpad Venture Group. Christopher is the Chair of the Angel Capital Association. This makes the pair incredibly well suited to tackle the problem angel investors, and early stage investment managers face with managing their portfolio. As an angel investors portfolio grows so do investor reports, follow-ons, note conversions, warrants, and tax deadlines. Many view diversification into a large number of companies as key to success, so as one quickly outgrows basic tools like spreadsheets and email folders Seraf is the place to turn. The solution is still fairly new so pricing is reasonable starting at $10 a month at the time of this writing.</p> <h2>Feedback</h2> <p>At Fund Wisdom we review these portfolio offerings to help you with your early stage startup investments. We want to hear from you. We look forward to learning about your experience with these offerings and if there are others we should cover. Let us know in our comment section below.</p> </div> <span rel="schema:author"><a title="View user profile." href="/users/brian-thopsey" lang="" about="/users/brian-thopsey" typeof="schema:Person" property="schema:name" datatype="">Brian Thopsey</a></span> <span property="schema:dateCreated" content="2019-11-20T11:38:08+00:00">Wed, 11/20/2019 - 06:38</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/retail-investors" hreflang="en">Retail Investors</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 Jhonson" 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="">Jhonson (not verified)</span></span> </div> <div class="comment-date"> Mon, 04/30/2018 - 23:10 <span property="schema:dateCreated" content="2018-05-01T03:10:55+00:00" class="hidden"></span> </div> <span class="comment-reply"> <drupal-render-placeholder callback="comment.lazy_builders:renderLinks" arguments="0=72&amp;1=default&amp;2=en&amp;3=" token="T7rH6NOavD19jtoL8OxTKnLzc-usUssVXQIllUuLmCM"></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>It sounds good to read :)</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"><a title="View user profile." href="/users/brian-thopsey" lang="" about="/users/brian-thopsey" typeof="schema:Person" property="schema:name" datatype="">Brian Thopsey</a></span> </div> <div class="comment-date"> Wed, 11/20/2019 - 10:28 <span property="schema:dateCreated" content="2019-11-20T15:28:31+00:00" class="hidden"></span> </div> <span class="comment-reply"> <drupal-render-placeholder callback="comment.lazy_builders:renderLinks" arguments="0=138&amp;1=default&amp;2=en&amp;3=" token="KqtVDNEhLMZRGVo5g-hle9Fk2u4T1lxaJNot8o1-GK8"></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>I appreciate the feedback. Not sure where the sound is coming from, but I take this as advice to provide more audio beyond our <a href="/investors/venture-investing-blogs-podcasts">list of Podcasts we recommend</a>.</p> </div> </div> </div> <div class="cleared"></div> </div> <!-- End Comment entry--> </article> </div> </div> </div> <div class="cleared"></div> </div> Wed, 20 Nov 2019 11:38:08 +0000 Brian Thopsey 5674 at https://fundwisdom.com https://fundwisdom.com/article/brian-thopsey/angel-portfolio-management#comments https://fundwisdom.com/article/brian-thopsey/angel-portfolio-management#comments Invest before the IPO - Equity Portals https://fundwisdom.com/article/brian-thopsey/invest-ipo-equity-portals <span property="schema:name">Invest before the IPO - Equity Portals</span> <div property="schema:text" class="field field--name-body field--type-text-with-summary field--label-hidden field__item"><p>With the influx of initial public offerings (IPOs) and the first day increase in price the question arises for many - How do you get in before, to capture that value creation? Investment banks, "Wall Street" have a monopoly over the IPO process. However, new technological advances are challenging the investment banks' control of the IPO market and could create new channels for investors to pick up shares through early stage financing.  </p> <p><img alt="3 People in front of City View" data-entity-type="" data-entity-uuid="" src="/sites/all/files/cfund//ipo.jpeg" style="float:right;margin:15px;" class="autofloat-odd " /></p> <h2>Initial Public Offerings</h2> <p>An initial public offering is when a private company decides to go public by selling shares of equity to outside investors. This gives companies a way to <a href="/raise-capital">raise money</a> without taking on more debt. When a company decides to go public, they can't just call up retail investors and offer to sell them some shares. The startup must go through several stages before their shares finally reach the public.</p> <p>First, the company needs to find an investment bank willing to set up an IPO. If a company looks extremely promising, big-name banks like JP Morgan, Goldman Sachs, etc., will compete for the opportunity to issue shares.</p> <p>Once an investment bank decides to take on the company, the investment bank splits the value of the company into shares and decides on a price per share in a process known as underwriting. Next, the investment bank divides the shares among a group of banks or other institutional investors to spread around the funding and the risk. Once the institutional investors have gotten their shares, the company's stock will finally go public and retail investors will be able to buy in. The whole IPO process is expensive and time-consuming as this "wedding day" approach can take as much as six months to complete.</p> <h4 dir="ltr">List of top IPOs</h4> <p>by Renaissance Capital<img alt="" data-entity-type="" data-entity-uuid="" src="/sites/fundwisdom.com/files/styles/300x300_fit/public/field/image/alibaba_group_headquarters.jpg" style="margin: 5px;float:right;width:200px;" class="autofloat-even " /><br /><a href="https://www.renaissancecapital.com/IPO-Center/Stats/Largest-Global-IPOs"><img alt="Top IPOs by Renaissance Capital" data-entity-type="file" data-entity-uuid="669e9a6f-fb75-4860-aaf5-b15deb4d05ef" src="/sites/fundwisdom.com/files/inline-images/top-IPOs.JPG" style="width:400px;" class="autofloat-odd " /></a></p> <p dir="ltr">Alibaba Group Holding Ltd. raised a record-breaking $21.8 billion in its IPO. Many investors were dismayed not being able to get the price they were hoping for on the offer. The next record-breaking start-up may already be seeking investment, which will allow investors to get ahead of the pack.</p> <p style="font-size:8pt">Advertisement<br /><a href="https://www.anrdoezrs.net/click-7643827-13557444" target="_top"><img alt="Zacks Trade" border="0" height="90" src="https://www.lduhtrp.net/image-7643827-13557444" width="728" class="autofloat-even " /></a></p> <h3>Marketing the Offering - The Road Show</h3> <p>Most companies will need to spend time promoting and marketing themselves before they'll track down an investment bank willing to issue an IPO.</p> <h2>High Cost</h2> <p>Although IPOs can be an attractive way to gain funding and increase exposure, the IPO process bears a high cost to retail investors and the company looking to list. When a company launches new shares on the stock market it can be a frustrating experience.</p> <p><img alt="" data-entity-type="" data-entity-uuid="" src="/sites/all/files/cfund//10467727_779326325433038_1237808063_n.jpg" style="float:right;width:400px;" class="autofloat-odd " />Since the investment banks allocate shares to other large financial institutions before releasing them to the public, regular investors don't have equal investment opportunities. IPOs regularly run out of shares at the initial price and retail investors can only buy in later at a higher market price.</p> <p>This distorts the market and creates unfair trading opportunities for the institutional investors. Henry Davis, an investor at Index Ventures, points out that "whoever gets shares in an offering is typically carefully selected by the syndicate banks - and who they choose to give shares to can have a meaningful impact on the share price after trading begins." This also <a href="/article/crowdfunding-and-financial-world">c</a>reates a conflict of interest for the banks because the way they decide on an allocation on shares might be more based on their trading profits rather than the best interest of the company going public.</p> <h3>Twitter Example</h3> <p>An example of the problem with unfair issuance happened when Twitter announced it was going public. Fidelity, a brokerage firm with a massive investor base, wanted 23 million shares of Twitter. They were instead only allotted 250,000. Fidelity, an active member in the debate against the IPO monopoly, expressed their frustration after receiving this low number of shares compared with the large demand from their customer-base of retail investors.</p> <p>Once Twitter's shares went on to be traded on public exchanges Fidelity investors eventually owned 22 million shares, but never got a chance to buy in at the price they wanted during the IPO. When major players in the industry are upset, changes have to be on the horizon. Head of equity origination at Fidelity Capital Markets, Hank Erbe, critiques that although technology within finance has flourished over the past decade, "nowhere has technology touched the IPO market. And that is the final frontier."</p> <p>Fidelity "fired warning shots at Wall Street" this June by pitching to venture capitalists and other investors about finding alternative methods to the traditional IPO. The IPO method can be old-fashioned because "Wall Street still has a lock on the way stock offerings work." William Hambrecht of WR Hambrecht was invited for his firms offering of "open IPOs,'' which provide open access to stocks that are going live to the public. Another way that both the individual investor and the entrepreneur can get greater transparency and lower costs is to raise capital through crowdfunding.</p> <p> </p> <h2>Get in before the IPOs</h2> <p><img alt="" data-entity-type="" data-entity-uuid="" src="/sites/all/files/cfund//10502660_903137629702408_1544029086_n.jpg" style="float:right;width:500px;" class="autofloat-even " /></p> <p>Equity Crowdfunding can be used to get a company off the ground in the early stages of its growth and provide retail investors access. IPOs typically come later in the company's evolution - often after early rounds of funding from family, friends, angels and/or venture capitalists. In an equity offering on digital portals, a young company can reach more investors online. Equity Crowdfunding can provide a process for access to shares on a first-come, first-serve basis rather than the predetermined allocation of an IPO. By using equity crowdfunding platforms, like those listed on Fund Wisdom, startups are able to quickly and inexpensively raise capital while small investors can buy into new companies while avoiding the hurdles of IPOs.</p> <p> </p> <p>(photocredit: <a href="http://instagram.com/andreyrus95">Andrey Kozlov</a>)</p> <h3>How it Started</h3> <p dir="ltr"><img alt="Obama Jobs Speech to Joint Session of Congress" data-entity-type="" data-entity-uuid="" src="/sites/all/files/cfund//obama_jobs_speech_to_joint_session_of_congress_0.jpg" style="margin: 10px;float:left;" class="autofloat-odd " /></p> <p dir="ltr"><a href="/about/jobs-act-title-iii">Title III of the Jumpstart Our Business Startups (JOBS) Act</a> was passed to help re-open US capital markets to emerging growth companies. This enabled non-accredited investors to invest and partake in investing in start-up businesses and private firms. This was intended to allow larger groups of people to invest smaller amounts of money, and accordingly, had the potential to enhance entrepreneurs' chances of success, improve economies, and increase job availability.</p> <p dir="ltr">Emerging growth companies (EGCs), which would benefit most from JOBS Act provisions. Firms with high proprietary disclosure costs, such as biotechnology and pharmaceutical firms, increased IPO activity the most. The belief was that these firms were likely to take advantage of the JOBS Act's de-risking provisions, allowing them test the waters before going public.</p> <h2>The Opportunity</h2> <p dir="ltr">Although the evidence presented in this study reveals that the JOBS Act has been successful in encouraging emerging high growth companies to go public, the author also points out that many small firms could still achieve greater operating profits through being acquired rather than depending on organic growth.</p> <p dir="ltr">If you are seeking to invest in businesses before the initial public offering in order to capitalize on high growth firms, you can view the current <a href="/investors">investment opportunities available now</a>. We offer solutions to help find and <a href="/analytics">analyze the next start-up investment</a>.</p> </div> <span rel="schema:author"><a title="View user profile." href="/users/brian-thopsey" lang="" about="/users/brian-thopsey" typeof="schema:Person" property="schema:name" datatype="">Brian Thopsey</a></span> <span property="schema:dateCreated" content="2019-11-15T12:00:50+00:00">Fri, 11/15/2019 - 07:00</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>, <a href="/tags/retail-investors" hreflang="en">Retail Investors</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> Fri, 15 Nov 2019 12:00:50 +0000 Brian Thopsey 312 at https://fundwisdom.com 7 Tips for Raising Money via Equity Crowdfunding https://fundwisdom.com/article/brian-thopsey/7-tips-raising-money-equity-crowdfunding <span property="schema:name">7 Tips for Raising Money via Equity Crowdfunding</span> <div property="schema:text" class="field field--name-body field--type-text-with-summary field--label-hidden field__item"><p>Raising money for an idea is a challenge few succeed at. At Fund Wisdom our goal is to help both entrepreneurs and investors leverage innovative financial technologies to raise capital and improve returns. We interview founders to uncover tips in the process of raising capital using equity funding portals to help you select which platform to use, build your listing, gain further traction to achieve your funding goals, and avoid any pitfalls in the process. In this piece we focus on regulated non-accredited platforms. I connected to Max Weissberg in his outreach on our site regarding his listing. I go through 7 tips he shared from his journey and offer up some commentary on each.</p> <h2>The Listing</h2> <p><img alt="Karaganda on StartEngine" data-entity-type="file" data-entity-uuid="c668d6cf-71da-44b8-8cbf-4b64a7340049" src="/sites/fundwisdom.com/files/inline-images/karaganda%20StartEngine.JPG" style="width:700px;" class="autofloat-odd " /></p> <p>Max Weissberg is listing equity in a film<a href="/%20https%3A//www.startengine.com/karaganda">,</a> <a href="/%20https%3A//www.startengine.com/karaganda">Karaganda, on StartEngine</a>. The film is about Vladimir, a prisoner in a Soviet prison camp on a mission to rescue his wife, also imprisoned in the Karaganda region. The film has already won several awards and raised a round of funding. It was included in the 2014 AFI DGA showcase and won 5 festival awards. It raised <a href="https://www.kickstarter.com/projects/848540308/karaganda"><span class="money">$32,311</span> on Kickstarter</a> across 127 backers. Their listing on <a href="/platform/startengine">Start Engine</a> has raised $149,600 from 205 investors at the time of this being written. They still have 44 days left in the round, so we expect these numbers to grow. On top of building Luftmensch Films, a New York film and television company Max works full time at Viacom as a Producer and Editor. I respect the hustle. </p> <h2>1. Selecting a Platform</h2> <h3>Max</h3> <p>My team and I had never heard of Crowd Equity funding until Startngine reached out and pitched their services. Raising money online? It seemed hard to believe. Like an educated consumer, I researched the platform and others in order to make the best decision. I also spoke with other projects on Startengine. One factor that led us to ultimately to choose Startengine over the others was the fees associated with other platforms. Startengine has no required fees, but charges for rounds of compliance if they exceed three. Wefunder, like Startengine, also has no fees. Republic.co requires $1500 for the Form C compliance and another $1500 for an escrow agent. It turns out Republic didn’t want us anyway because we didn’t have enough of a following. After learning about another project’s problems installing their Facebook pixel on Wefunder, we ultimately went with Startengine.</p> <h3>Brian</h3> <p>An important consideration prior to listing is the type of security you offer whether it be <a href="/article/brian-thopsey/difference-between-debt-and-equity-based-financing-and-investment">debt or equity which we break out some of the pros and cons of each</a>. We focus on equity but our discussion with Max can apply to either.</p> <p>Max discusses fees being a driving factor in his selection. We share side by side view of <a href="/platform-fees">costs associated to entrepreneurs and investors</a>. He also covers a few <a href="/about/jobs-act-title-iii">regulatory requirements from the SEC which we help explain</a>. Each platform has a different vetting process to determine which companies they allow to list their offerings which we detail in each individual listing. We also offer an <a href="/article/brian-thopsey/top-10-equity-crowdfunding-portals-2019">independent rating of platforms</a>.</p> <h2>2. Listing on the Platform</h2> <h3>Max</h3> <p>As a filmmaker, nothing I’ve encountered in my professional experience has taught me how to fill out financial forms. Thankfully Startengine has transformed the “Form C” (which is filed with the SEC to officially start a project) into a fill-in-the-text boilerplate. As part of our Form C requirements, we had to figure out what the potential risks were, what our company was worth before seeking funding, and what exactly the shareholders were getting when they invested. For a tech company this is easier to explain; for a film, less so. In some cases, we copied language word-for-word from another (approved) film project on Startengine, yet this wasn’t approved by Startengine’s compliance team. The SEC often changes its requirements, so I learned from Startengine, and we were back to figuring this out for ourselves. Somehow we managed.</p> <p>Crucial, of course, was keeping the costs down. Our expenses were for a CPA to do a required review ($1200) and for the SEC background checks (Total: ~$800). In total, we avoided all of our legal costs as one of our partners is a lawyer. For the most part, as long as one has well-written articles of incorporation for their company, it’s possible to bypass hiring a lawyer in order to launch a project.</p> <h3>Brian</h3> <p>This details some of the hidden costs associated with listing that are difficult to factor in from the outset. Max is lucky to have a team member with legal expertise as that would have added on. We <a href="/investors/services/top-legal-tax-equity-crowdfunding">list a few Legal and Tax experts</a> that specialize in equity funding portals.</p> <h2>3. Marketing the Offering</h2> <h3>Max</h3> <p>Within our first day, we had raised nearly $20k. But I quickly learned that finding investors was not easy. Most if not all of the campaigns use some combination of Facebook and Google ads. Startengine even supplied us with useful set of keywords for targeting on Facebook: “Angel Investors, Accredited Investors, Equity Crowdfunding, and Online Investing.” Also crucial was to have video ads with a “disruptor” – something to cause someone to slow down their scrolling to watch our video. In our case, our most successful disruptor was a mafioso pointing a gun directing at the screen. Unfortunately Facebook has not always approved this ad and others, so we are frequently left to their whims whether we can raise money or not.</p> <p>As it turns out, the SEC has regulations about advertising, namely not to mix financial specifics (115% re-coupment at $100 a share…) with general statements about why the project might be a good investment. At the end of the day, it’s really up to Facebook what gets seen and what doesn’t – for reasons that are seldom consistent.</p> <h3>Brian</h3> <p>Just because you had success with your listing on Kickstarter or have seen some positive initial traction does not guarantee that people will flock to your equity offering. It is helpful to establish a network of potential investors ahead of the listing as Max states <a href="/platform/republic">Republic</a> and others require this. Online advertisers like search engines (Google Max's example), and social platforms (Facebook and Twitter) offer great ways to target potential investors.</p> <h2>4. The Competition</h2> <h3>Max</h3> <p>Generally speaking, few companies are raising money on these platforms. Roughly 60-70 companies are live on Startengine. Currently 49 companies are live on Wefunder, and a few dozen more on the smaller platforms. If you peruse these sites you will inevitably start seeing ads for the campaigns in your Facebook feed. Surprisingly few films have decided to raise money through crowd equity. Based on my own experience, I don’t think many filmmakers know about raising money through crowd equity and are content to use platforms like Kickstarter and Indiegogo that rely on donations instead of investments. There is also the issue with paperwork, which Kickstarter does not require. To distinguish ourselves from the competition, we decided to allow people to see our budgets and script, which few projects, if any, provide.</p> <p>Personally, I think it’s only a matter of time until celebrities start raising money via portals like Startengine, just as celebrities have used Kickstarter to bring attention to their own projects. Thus, anyone who starts a project now will have an easier time than after word starts to spread.</p> <h3>Brian</h3> <p>Max browsed a few of the top regulated non-accredited platforms. We are <a href="/investors/platforms/equity-funding-dashboard">building a dashboard</a> to help you gain insight on that data.</p> <h2>5. Keeping the Energy Going</h2> <h3>Max</h3> <p>One of the hardest things for any campaign is keeping the energy up when little is happening day-to-day. Taking the advice of David Jay Willis, who successfully raised money on both Wefunder and Startengine for his Christmas movie project, we created a contest on Gleam. The prize is to be a an extra in the film and people must visit our startengine page (or follow our Twitter account) to enter. In addition to this, we are actively seeking coverage on influential blogs and beginning discussions with actors who may be in the film. Updates are essential, but because Startengine now reviews every update for compliance issues, it’s difficult to post regular updates that are delayed several days.</p> <h2>6. Hiring the Right Marketing Vendors</h2> <h3>Max</h3> <p>From the very beginning, we were approached by small companies willing to sell us investor lists or do a large email blast on behalf of our projects. Some quick research helped us decide this was not the correct approach. We also briefly hired a Facebook marketing firm that overcharged us and had issues running our ads with the subtitles. After seeing their many mistakes, we decided to fire them. A red flag – which I should have spotted – was the (first) company’s unwillingness to connect us to previous customers. Always do your research. At the moment we are about to hire a new marketing firm to help optimize our ads. </p> <h3>Brian</h3> <p>Finding the right marketing agency can be a challenge while trying to juggle everything else Max has on his plate. Since advertising an equity offering to non-accredited investors is somewhat new these challenges are not surprising. Have a good firm to share that specializes in this feel free to share in the comments.</p> <h2>7. What is on the Horizon</h2> <h3>Max</h3> <p>There’s no doubt that regulation crowd equity funding is here to stay. Startengine claims to have raised more than $100 million and funded more than 275 companies. Wefunder has also crossed the $100 million mark, having funded 312 startups. Despite the benefit the 2016 JOBS act has had on allowing companies like ours to raise money, many issues remain. One investor wanted to invest in our company outside our Startengine offering through a Reg D. But we were forced to reject the investment because he wasn’t an accredited investor, which the law requires, and had already exceeded his allowed investment based on net worth. Despite being a “free” country, our investments are still heavily regulated by the SEC. Thankfully we haven’t spent any money on lawyers to file our Form C and Reg D, but most entrepreneurs will likely not have the patience to sift through the SEC’s unfriendly website.</p> <h3>Brian</h3> <p>Data on the industry is challenging to qualify. I discuss some of the issues in our <a href="/article/brian-thopsey/top-10-equity-crowdfunding-portals-2019">rating of top platforms</a> as we <a href="/investors/platforms/equity-funding-dashboard">build the dashboard</a>. I really appreciate Max sharing so much with us. I encourage you to check out his offering: <a href="/%20https%3A//www.startengine.com/karaganda">Karaganda, on StartEngine.</a></p> </div> <span rel="schema:author"><a title="View user profile." href="/users/brian-thopsey" lang="" about="/users/brian-thopsey" typeof="schema:Person" property="schema:name" datatype="">Brian Thopsey</a></span> <span property="schema:dateCreated" content="2019-11-09T11:23:12+00:00">Sat, 11/09/2019 - 06:23</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> Sat, 09 Nov 2019 11:23:12 +0000 Brian Thopsey 9448 at https://fundwisdom.com Crypto Hardware Wallet - Ledger Nano X Review https://fundwisdom.com/article/brian-thopsey/crypto-hardware-wallet-ledger-nano-x-review <span property="schema:name">Crypto Hardware Wallet - Ledger Nano X Review</span> <div property="schema:text" class="field field--name-body field--type-text-with-summary field--label-hidden field__item"><p><a href="https://shop.ledger.com/pages/ledger-nano-x?r=10988c46bbfd"><img alt="Ledger Nano X - The secure hardware wallet" src="https://www.ledgerwallet.com/images/promo/nano-s/ledger_nano-s_3-0-0x2-5-0.jpg" style="width:280px;float:right;margin:10px;" class="autofloat-odd " /></a>I’m not able to invest in many of the startup <a href="/investors/companies">offerings</a> we write about due to not being deemed worthy by the <a href="/article/brian-thopsey/non-accredited-investors-capitalize-access-private-equity">SEC based upon my income and net worth</a>. It's frustrating as I feel I know a decent amount about financial markets, the technology and strategies the companies employ but that is not what is assessed. So I have been spending more of my time researching cryptocurrency and the blockchain technologies they are built on. I do this as anyone can invest. As I invested time and money into new digital currency offerings I began learning of some of the challenges with this new market. I came across several horror stories of people getting hacked and losing everything from their wallet. So I began looking for a way to improve the safety around storing my digital tokens.</p> <p>After a ton of research I chose a crypto hardware wallet, the Ledger Nano X. I immediately signed up for their affiliate program at the same time as buying the device. Read more to see what is in the box, how to set it up, and some of the challenges I had to overcome to get going.</p> <h3>How do I keep my Cryptocurrency Secure</h3> <p><meta charset="utf-8" />Your US dollars, and many fiat currencies, have a well-established ecosystem to keep your money and wealth comfortable and secure. We have a (rather highly-regulated) banking system to store dollars and transfer them. We have federally-mandated programs like FDIC to insure your bank deposits. And we have technologically sophisticated private sector companies like Visa, Mastercard, and PayPal to facilitate payments with our dollars while countering fraud.</p> <p><meta charset="utf-8" />But this ecosystem has taken nearly a hundred years to achieve, and we find ourselves taking for granted the level of consumer protection we have reached.  The ecosystem is still not perfect, and with innovations in cryptocurrencies come challenges with security.</p> <p dir="ltr" id="docs-internal-guid-bab51e10-7fff-8533-b59c-042db2e2e816">Cryptocurrencies present safe storage challenges  in the form of identity theft and pilfered assets. Some individuals have shared their experiences with these challenges, like <a href="https://twitter.com/AmberBaldet/status/1060714102685863936">Mike Dudas, Ryan Selkis problems with hacks to identity via phone porting</a>. The ecosystem is still being developed, and risks are prevalent. As of 2019, <a href="https://discover.ledger.com/hackstimeline/">over one and half billion dollars worth of cryptocurrency have been hacked</a>. The Ledger Co., a leading manufacturer of cryptocurrency wallets, maintains a striking visual timeline of the major crypto-currency exchange hacks on its website. The escalation of attacks, and their increasing audacity, is all too clear.</p> <p><meta charset="utf-8" />Hacks, fraud, and scams are part of every new cultural and technological revolution. But digital currencies have changed and will continue to change the way we use money. The appropriate response to this change is not to avoid innovation, but to learn how to leverage new developments to ensure your investments are secure.</p> <h3>Cryptocurrency Wallets</h3> <p dir="ltr" id="docs-internal-guid-81428664-7fff-227d-5417-a450c47fb1c7">Nobody, not even Jeff Bezos, likes to lose money. So when you have something of value, like Bitcoin or Ethereum, where do you put it to keep safe? Enter the cryptocurrency wallet. It’s a secure way to store your cryptocurrency assets. If you want to buy and hold cryptocurrency, or use it as a currency to buy and sell products, you need an online wallet account.</p> <p><img alt="Statista Crypto Wallet Usage" data-entity-type="file" data-entity-uuid="6e2960e2-074e-4a27-a3ab-b7db7d7165ee" src="/sites/fundwisdom.com/files/inline-images/wallets%20statista.jpg" style="width:580px;" class="autofloat-even " /></p> <p>Source: Statista, via PC Magazine: <a href="https://www.pcmag.com/roundup/363529/the-best-cryptocurrency-wallets">https://www.pcmag.com/roundup/363529/the-best-cryptocurrency-wallets</a></p> <p dir="ltr">Like Bitcoin, cryptocurrency is decentralized, as in it doesn’t rely on a bank as the central way to store the value. The entire network of bitcoin allows for storage of assets; there is no longer a need for a single institution to be there to protect and oversee it. The benefit is that this helps drive the price down by reducing overhead.</p> <p dir="ltr"><meta charset="utf-8" /></p> <p dir="ltr" id="docs-internal-guid-238118bf-7fff-386f-1b46-571c6d3c9585">There are concerns arising over the storage of your crypto assets in digital wallets. One cannot go to someone for liability to recover stolen assets like you can when you store your money at a bank, so hardware wallets were developed as a measure of added security.</p> <p dir="ltr">When I explain cryptocurrency and blockchain many try to equate it to their banking experience. While in banking you can log in to see the money in your account, your bank account really isn’t anything more than a list of assets which you can control with your password. Cryptocurrency wallets are similar in that your private key unlocks the right for you to buy, sell, or spend your currency.</p> <p dir="ltr">Unlike traditional online banking, however, every transaction made is stored on the blockchain. For your online US dollar checking account, you need to protect your password and your phone.what you need to protect is your password and your phone. For your crypto wallet, you need to protect your password and the keys for your cryptocurrency account.</p> <h2>2019 Leading Wallets</h2> <p dir="ltr" id="docs-internal-guid-ed70a1cf-7fff-b1ac-3adf-e4f007c25455">As the cryptocurrency market has grown, so has the ecosystem around it. Today, there are a number of providers of digital wallets and manufactures of hardware wallets. Below I’ve collected some of the better reviews and commentaries that survey your options:</p> <ul><li><meta charset="utf-8" />Ledger <a href="/%20https%3A//ripplecoinnews.com/top-5-best-cryptocurrency-wallets">rated #1 by Ripplecoinnews</a> (June 2019)</li> <li><a href="https://www.pcmag.com/roundup/363529/the-best-cryptocurrency-wallets">Oliver Rist of PC Mag rates software based wallets</a> placing Coinbase on their list (September 2019)</li> <li><a href="https://coindiligent.com/best-cryptocurrency-wallets"><span class="author vcard" itemprop="author" itemscope="itemscope" itemtype="http://schema.org/Person"><span class="author-name" itemprop="name">Pascal Thellmann</span></span> of Coindiligent rates Ledger #1</a> (August 2019)</li> <li><a href="https://www.buybitcoinworldwide.com/wallets/"><span class="author-name">Jordan Tuwiner</span> of Buybitcoinworldwide writes a very elaborate piece on wallets</a>,  covering Ledger (June 2019)</li> <li><a href="https://www.thebalance.com/best-bitcoin-wallets-4160642">Eric Rosenberg of theBalance ranks Coinbase #1</a> with the only mention of a hardware wallet as Trezor (October 2019)</li> <li><a href="https://coinswitch.co/news/top-10-cryptocurrency-wallets-to-look-forward-to-2019">Anisa Batabyal of Coinswitch</a> ranks Ledger #1 .(August 2019)</li> </ul><h2>Digital vs Hardware Wallets</h2> <p><meta charset="utf-8" /></p> <p dir="ltr" id="docs-internal-guid-1c1ac5db-7fff-6d22-440f-33a52e994eee">A hardware wallet is a physical device that digitally stores your cryptocurrency. The primary reason that you’d have a hardware wallet is to keep your currency isolated so that it cannot be accessed without the physical device. Just like  the cash you hold in your leather wallet, your cryptocurrency cannot be taken from your hardware wallet unless someone physically acquires it, the keys, and your passwords. But unlike a leather wallet, which can simply be opened and your hard-earned bills removed, hardware wallets have a wide range of security features.</p> <p dir="ltr">Many people I’ve tried to explain the concept of a crypto hardware wallet to try to equate it to an Apple Wallet, in that you’re storing a means of payment on a physical device. Apple, Samsung, Google, and others have built mobile applications to store credit card and other payment data for shopping at retailers using your phone. Cryptocurrency hardware wallets instead store value through digital currency like Bitcoin while adding a layer of security to the storage.</p> <h2>Ledger Nano X</h2> <p>I chose to buy the Ledger Nano due to the top rating <a href="https://coinswitch.co/news/top-10-cryptocurrency-wallets-to-look-forward-to-2019">by Anisa Batabyal of Coinswitch</a> and a relationship I just opted into with Ledger to help sell the devices. I look to share both positive and negative experiences from my purchase.</p> <p>Our Review is focused on the Nano X, but I understand the device is very similar to the Nano S with the addition of Bluetooth capabilities.</p> <h2>Unboxing</h2> <p>The Ledger Nano X comes with the USB connector, a getting started booklet, the device itself, and a keychain.</p> <p><img alt="Unboxing Ledger Nano X: Packaging, USB, Keychain, user guide" data-entity-type="file" data-entity-uuid="6784bdb4-2a0e-442e-bf37-2952bf5bb668" src="/sites/fundwisdom.com/files/inline-images/Ledger%20Nano%20X%20Fund%20Wisdom%20with%20box.jpg" style="width:500px;" class="autofloat-odd " /><br />  </p> <p>I have no idea what to do with the keychain as it does not appear to fit well in the loop and I do not intend to carry it around everywhere I go... yet.</p> <p> </p> <h3>Setup</h3> <p>Upon taking the device out the first thing I wanted to do was begin to transfer my coins stored in my Coinbase wallets over to my fancy new hardware wallet. The getting started notebook helps walk you through initial software setup and secret key storage. Ledger provides a space in the getting started booklet to write down each of your secret keys or suggests storing the keys in cold storage. To achieve cold storage you can save txt files on your own external drives, not connected to the internet, or use services like Amazon Glacier and Google Coldline. Cold Storage means that the file is offline, physically separated from being connected to the Internet. The Ledger site offers more <a href="https://www.ledger.com/welcome-to-digital-asset-custody-a-city-of-trade-offs/">detailed instructions and background on this topic, digital asset custody</a>. </p> <p>You could just write the key combo on the notebook, Ledger provides, and store it somewhere safe in your home, which is what I did. Keeping your keys online, storing your password in a file on your laptop, or connected cloud service can be unsafe. Each way can be, and increasingly is, hacked.</p> <h3>Installing apps</h3> <p>In order to store or trade any cryptocurrency each token requires a different application to be downloaded and installed on the device. After installing Ledger Live I had to go through and install Bitcoin, Ethereum, Zcash, Stellar, and Tezos.</p> <p>This was when my experience began to fall apart. I multi-tasked while installing and connecting my accounts as there was a loading wait time through a few steps. This slowed everything down. When I would take my attention away, waiting for a download or install, I would need to re-enter the password into the ledger device every time. I am new to the whole process so likely there are better ways to manage, but it started to drive me crazy using the interface and the two small buttons to enter the 8 digit code every time I turned away.  </p> <h3>Buy &amp; Trade Cryptocurrencies</h3> <p>I prefer to leverage the Coinbase platform because of the Coinbase Earn program. You can <a href="https://www.coinbase.com/join/thopse_0">earn $10 by signing up</a> for an account, and in the Earn program you can collect well beyond the $10 by watching educational videos on new coin offerings.</p> <p><a href="https://www.coinbase.com/join/5c93d7f14a0e7f025ef2d57c"><img alt="Coinbase Buy and Sell Etherium, Lightcoin, Bitcoin, and other Cryptocurrencies" data-entity-type="file" data-entity-uuid="76eec8a2-b302-4fca-8d24-0c04fbf45230" src="/sites/fundwisdom.com/files/inline-images/coinbasebanner1.jpg" style="width:280px;float:right;margin:10px;" class="autofloat-even " /></a></p> <h3>Trade offs: Cost, convenience</h3> <p dir="ltr" id="docs-internal-guid-bfdc2c44-7fff-b1c9-6486-9347c19c0b47">I’ll be honest - it was a pain to have to continually enter the codes. Plus, there is a transaction cost to move from your trading platform wallet, like Coinbase Wallet, to the ledger wallet address.</p> <p dir="ltr" id="docs-internal-guid-110951f3-7fff-3acf-6444-4d7ead7bef73">I haven’t had to engage with Customer Support at all yet, but I did end up crashing the device, which required a repair.</p> <h2>Conclusion</h2> <p><meta charset="utf-8" /></p> <p dir="ltr">The independent ratings, security, broad range of currencies available, simplicity, comfort of going with an established company, and my relationship with Ledger, allow me to recommend the Nano X. I would just qualify my recommendation by factoring in the total amount and number of currencies being stored.</p> <p dir="ltr">3 independent authors that rate Ledger number 1 wallet, so it is not just my opinion. If you <a href="https://shop.ledger.com/pages/ledger-nano-x?r=10988c46bbfd">Buy a Ledger Nano</a> we look forward to hearing about your experience in the comments below.</p> </div> <span rel="schema:author"><a title="View user profile." href="/users/brian-thopsey" lang="" about="/users/brian-thopsey" typeof="schema:Person" property="schema:name" datatype="">Brian Thopsey</a></span> <span property="schema:dateCreated" content="2019-11-06T23:29:09+00:00">Wed, 11/06/2019 - 18:29</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" hreflang="en">Blockchain</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 Jhonson" 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="">Tony (not verified)</span></span> </div> <div class="comment-date"> Sun, 10/13/2019 - 04:20 <span property="schema:dateCreated" content="2019-10-13T08:20:14+00:00" class="hidden"></span> </div> <span class="comment-reply"> <drupal-render-placeholder callback="comment.lazy_builders:renderLinks" arguments="0=133&amp;1=default&amp;2=en&amp;3=" token="w2cn2KemNXbKcbluYKDf4AYeksbKx43Mch6xxCgT4c4"></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>I find it hard to pick a winner of the best crypto hardware wallets. I do like Trezor which I started out with. But moved to Ledger when the S came out. Like this review says it is hard to make out just one winner <a href="https://gocryptowise.com/5-of-the-best-crypto-hardware-wallets/">https://gocryptowise.com/5-of-the-best-crypto-hardware-wallets/</a>. Can you own several hardware wallets or is that just stupid?</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"><a title="View user profile." href="/users/brian-thopsey" lang="" about="/users/brian-thopsey" typeof="schema:Person" property="schema:name" datatype="">Brian Thopsey</a></span> </div> <div class="comment-date"> Mon, 10/21/2019 - 19:00 <span property="schema:dateCreated" content="2019-10-21T23:00:22+00:00" class="hidden"></span> </div> <span class="comment-reply"> <drupal-render-placeholder callback="comment.lazy_builders:renderLinks" arguments="0=134&amp;1=default&amp;2=en&amp;3=" token="b8Gdy_Xu6C-VHVNbAGigBASjYnCZ5UfRMAMIkeeUsFg"></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>Feels like overkill to own several.</p> </div> </div> </div> <div class="cleared"></div> </div> <!-- End Comment entry--> </article> </div> </div> </div> <div class="cleared"></div> </div> Wed, 06 Nov 2019 23:29:09 +0000 Brian Thopsey 9254 at https://fundwisdom.com https://fundwisdom.com/article/brian-thopsey/crypto-hardware-wallet-ledger-nano-x-review#comments https://fundwisdom.com/article/brian-thopsey/crypto-hardware-wallet-ledger-nano-x-review#comments Libra: Cryptocurrency By Facebook (In 5 Minutes) https://fundwisdom.com/article/brian-thopsey/libra-cryptocurrency-facebook-5-minutes <span property="schema:name">Libra: Cryptocurrency By Facebook (In 5 Minutes)</span> <div property="schema:text" class="field field--name-body field--type-text-with-summary field--label-hidden field__item"><p><img alt="Libra Logo with Mark Zuckerberg" data-entity-type="file" data-entity-uuid="d8505a09-16c2-449b-b20e-015036a0ca84" src="/sites/fundwisdom.com/files/inline-images/libra.JPG" style="width:700px;" class="autofloat-odd " /></p> <p>Renowned social media giant Facebook announced its plan to enter the cryptocurrency market with Libra. Their intent is to make money transfer painless, like sending messages and images. The currency is being built by a collective of other top firms that will universally accept the payment method. Their proposal is to create a safe, stable coin, by leveraging the network affect of their existing platform for distribution. The hope is for people all around the world to have access to equal financial opportunities. </p> <p><img alt="Libra Network of firms" data-entity-type="file" data-entity-uuid="8165f2b6-22c4-46b5-b12f-3ae8d18c98f6" src="/sites/fundwisdom.com/files/inline-images/libra-network.PNG" style="width:500px;" class="autofloat-even " /></p> <p>Some of the challenges the collective looks to solve:</p> <ul><li value="50">31% of the world’s population don’t have a bank account. <ul><li value="50">High costs and transaction charges for global transfer</li> </ul></li> <li value="50">The un-banked often pay higher fees for cash based money movement.</li> </ul><p>We understand the motive and vision hidden behind designing most cryptocurrencies, including Libra, to foster open access to financial markets. The Libra Blockchain is a programmable and decentralized database developed to support a more constant cryptocurrency that will have the potential to serve as a well-organized channel of exchange for billions of people all around the world. Libra is said to be setup as a separate independent association, not focused on profits. The Libra protocol scheme leverages blockchain technology to develop a financial infrastructure openly accessible, lowering hurdles to entry, and enhances reach to financial services.</p> <p>Thanks to Abishai James of <a href="https://mrdesigner.org/" target="_blank">MrDesigner </a>for his contribution to this article both in content and imagery. He wrote a much more <a href="https://mrbtc.org/libra/" target="_blank">detailed piece on Libra</a>.</p> <p>Bringing digital financial services closer to all, improving ease of access will undoubtedly impact the makeup of our current financial systems. Let us know your thoughts on the impact this will have in the comments below.</p> </div> <span rel="schema:author"><a title="View user profile." href="/users/brian-thopsey" lang="" about="/users/brian-thopsey" typeof="schema:Person" property="schema:name" datatype="">Brian Thopsey</a></span> <span property="schema:dateCreated" content="2019-11-06T13:47:36+00:00">Wed, 11/06/2019 - 08:47</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" hreflang="en">Blockchain</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, 06 Nov 2019 13:47:36 +0000 Brian Thopsey 9447 at https://fundwisdom.com https://fundwisdom.com/article/brian-thopsey/libra-cryptocurrency-facebook-5-minutes#comments https://fundwisdom.com/article/brian-thopsey/libra-cryptocurrency-facebook-5-minutes#comments Institutional Investors in Equity CrowdFunding Portals https://fundwisdom.com/article/brian-thopsey/institutional-investors-equity-crowdfunding-portals <span property="schema:name">Institutional Investors 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 world of equity funding portals and online marketplace lending continues to attract the attention of institutional investors, and their involvement in the industry appears poised to grow. I review market insights, venture and enterprise adoption, and how it affects everyday retail investors to provide insight to what large institutions think about the burgeoning sector, and where we are headed.</p> <p><img alt="London Skyscraper" height="400" src="/sites/all/files/cfund//london_0.jpg" style=" margin:10px" width="600" class="autofloat-odd " /></p> <h2>Market Insights</h2> <p>According to <a href="/investors/innovative-venture-reports/university-cambridge">University of Cambridge &amp; Chicago Booth School with KPMG &amp; CME Group</a> 21 percent of Equity Crowdfunding comes from institutional investors. This report was published in 2019.  The authors state, "institutional funders continue to drive alternative finance volume throughout the industry – and this is especially true in debt models. 88% of overall funding generated in the USA came from institutional funding – accounting for $37.6 billion." Equity is much smaller percentage compared to other alternative financial sectors that are more mature.</p> <p><img alt="Alternative investing table - Proportion of Funding from Institutional Investors, 2015-2017" data-entity-type="file" data-entity-uuid="2639afe2-6d16-47d5-9309-22aeed1117ac" src="/sites/fundwisdom.com/files/inline-images/15-to-17-data-ucambridge.JPG" width="600" class="autofloat-even " /></p> <p dir="ltr">Richards Kipped &amp; Orbe LLP and Wharton FinTech have <a href="http://www.rkollp.com/newsroom-publications-389.html">released</a> their 2016 Survey of US Marketplace Lending, which surveyed more than 300 institutional investors. Optimism abounds for the future of marketplace lending, with more than 80% of those surveyed believing that a bright future lies ahead. Those surveyed did express some concern about the future of the regulatory environment, and a good majority of respondents believe that a round of consolidation is likely on the horizon. I was not able to find an updated version of the report for 2018.</p> <p dir="ltr">“The unchecked optimism toward this industry, combined with the fact that it is still maturing, makes it an interesting one to watch, particularly for institutional investors that sense opportunity,” <a href="http://www.rkollp.com/newsroom-publications-389.html">said the Wharton Fintech President</a>, Uday Seth.</p> <p dir="ltr">While the report points to a prevailing sense of opportunity amongst the institutional investor crowd, not all professional investors are fully on board. A recent post on the <a href="http://www.forbes.com/sites/martinzwilling/2016/05/18/professional-investors-qualms-about-crowdfunding/#36da5b985423">Forbes</a> website outlined some of the concerns from the ‘I’m smarter than you’ crowd, which included the inexperience of crowdfunding investors, as well as the increased risk of startup investing.</p> <h3>Wall Street</h3> <p>Several <a href="https://next.ft.com/content/9df0f2a0-8fa3-11e5-a549-b89a1dfede9b">former big players</a> on Wall Street have have left their posts to focus on Fintech investments. Included among the old guard that have a newfound interest in the financial technology sector are former Citigoup CEO Vikram Pandit, and John Mack, the former CEO of Morgan Stanley. Both of the former Wall Street heads have made substantial investments in the sector, which points us to the potential that the emerging industry presents. <img alt="" height="272" src="/sites/all/files/cfund//cbinsights_fintech_investment.png" style="float: right; margin: 10px;" width="301" class="autofloat-odd " /></p> <p>Vikram Pandit invested in TransferWise, the cross-border payments company,  CommonBond, an online provider of student loans, and PeerIQ the credit risk assesment firm. He was among a group of investors, including former Goldman Sachs co-president Jon Winkelried, who put $2.7m into Orchard, a data and infrastructure provider for the marketplace lending sector. He also invested in MMKT Exchange, which is developing technology to improve liquidity in the secondary market for loans. He is now investing through the Atairos Group and The Orogen Group, independent private companies focused on supporting growth-oriented businesses. Atairos was launched in 2016 with more than $4 billion in committed capital. John Mack has invested and is on the board of LendingClub which he owns 2.4 million shares of and took part in a $10M funding round for credit rating startup New England Funding Technologes (NEFT). He is also an investor in Orchard along side Pandit. He invested in Dataminr, which analyses social media to create alerts for traders.</p> <h3>Venture Capital Firms</h3> <p>AngelList Syndicates are attracting top tier venture capital firms Sequioa (Lifx), Andreessen Horowitz (uBiome), Khosla Ventures (OpenDoor), Accel Partners (Gametime). These firms are qualified as top firms <a href="https://www.cbinsights.com/blog/venture-capital-peer-rankings/" target="_blank">according to CBInsights report</a> of General Partners ranking one another. Syndicates employ a market design feature that divides labor among participants. Lead investors conduct due diligence and monitor progress on behalf of those backing the syndicate. The lead investors and entrepreneuers endure  reputation and financial penalties for poor performance and enjoy rewards for positive performance. As Christian Cailini of MIT states, this aligns the incentives of leads, backers and entrepreneurs in a manner that directly addresses information asymmetry problems.</p> <h3>AngelList Syndicates</h3> <p><a href="https://csc-upshot.vc/">CSC Upshot Ventures</a> based in Palo Alto, CA. managed by <a href="http://honecap.com/">Hone Capital</a> (a subsidiary of the CSC Group) and Upshot Ventures, is a premier early stage venture fund concentrating on offering seed capital to tech companies at scale. The CSC Group, the fund’s largest investor is one of China’s top private equity firms committing a generous investment of $400M for startups on AngelList (2015). The first $100M was deployed through the VC fund CSC Upshot. In close partnership with AngelList the two subsidiaries have forged a new model of venture investing based on the needs of founders, investors and startup communities. Several AngelList officers also advise this fund.</p> <p>Maiden Lane based in San Francisco has worked with over 125 individual angel investors and invested in 300 startups since launching in 2014. The Funds investors include Top Tier Capital and Makena. In partnership with AngelList and Accomplice they launched <a href="https://angle.co/">Angel Funds</a>. Maiden Lane invests $35M from their Limited Partner commitment.</p> <p><a href="https://angel.co/e-merge">E-Merge</a>: a 3 partner Angel Fund based in Brussels. The company was founded in 1998, E-Merge has made 40 plus direct early stage investments mostly as lead investors (25+ in the EU &amp; 15+ in the US) and 200+ investments through AngelList Syndicates. The companies preferred business models are SaaS and Marketplaces. Their main areas of interest are E-Commerce Infrastructure &amp; Internet Infrastructure (with a special focus on payment systems), SMB services, Autonomous Vehicles (especially flying ones), and NewSpace opportunities (CubeSats services). Since 2016 E-Merge invests exclusively through via the AngelList Platform.</p> <p><a href="https://zpx.io/fund/zpx_ka_fund?ui_action=newsletter">ZPX KiloAngel</a>: is a premium Silicon Valley (SV) seed fund opportunity that ZPX is collaborating on with AngelList and Kilowatt Capital, a leading SFO-based proprietary investment firm. KiloAngel has been invited to become an Angellist platform seat-holder, which guarantees KiloAngel access to all deals, pro rata allocations, and data, as well as to operational, administrative, and advisory services. This allows KiloAngel to use AL’s proprietary data filters, syndicate lead system and compliance services to scale investments across a large number of start-ups in an efficient manner.</p> <p><a href="https://angel.co/funds">AngelList</a> and Access Funds: one investment grants an investor access to 200 startups. Investors receive exposure to multiple sectors, stages and geographies. Several funds under $15M, raised from investors on AngelList and managed by AngelList Advisors. Funds invest in deals negotiated and led by a select group of angels and venture capitalist firms.</p> <h3>Enterprise Adoption</h3> <p>Some large global businesses have tried the equity crowdfunding model. Indiegogo launched an equity based portion of their crowdfunding platform in partnership with <a href="/platform/microventures">Microventures</a> in November 2016. They were offering Title III investments to non accredited investors at as little as $100. After a few years Indiegogo ended up shutting the partnership down. Digital Federal Credit Union (DCU) opened up their own platform, <a href="/platform/growthfountain">Growth Fountain</a>. DCU is the 14th largest Credit Union in the US according to MX.</p> <p><img src="/sites/fundwisdom.com/files/field/image/NYC.jpg" style="width:600px;" class="autofloat-even " /></p> <h3>Retail and Non Accredited Investors Learn from Professionals</h3> <p>While institutional investors have some concerns about the future of the regulatory environment and the risks associated with crowdfunding, we’ve gained a little bit of clarity on how things will start to play out on the individual investor side. Title III of the Jobs Act <a href="http://fortune.com/2016/05/16/title-iii-jobs-act/">came into effect</a>, and with that comes the removal of the handcuffs from individual investors.</p> <p>Previously, accredited investors had the pick of the litter when it came to investing in the next big thing, while the little guy was forced to sit on the sidelines and patiently wait for an IPO that would likely be out of his reach. With the new rules, individuals can invest up to $2,000 in exchange for equity. Startups will also benefit from the new rules, to the tune of now being allowed to raise up to $1 million per year via crowdfunding. For those itching to get in the game and ready to put their $2,000 to work for them.</p> <p>Sifting through offerings and information available in this alternative financial technology market can be time consuming, and sometimes leave you walking away even more confused. At FundWisdom we make it easy to navigate the various <a href="/platform">platforms, costs, </a>and <a href="/platform">trends</a>. </p> </div> <span rel="schema:author"><a title="View user profile." href="/users/brian-thopsey" lang="" about="/users/brian-thopsey" typeof="schema:Person" property="schema:name" datatype="">Brian Thopsey</a></span> <span property="schema:dateCreated" content="2019-11-06T04:22:57+00:00">Tue, 11/05/2019 - 23:22</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/analytics" hreflang="en">Analytics</a>, <a href="/tags/retail-investors" hreflang="en">Retail Investors</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, 06 Nov 2019 04:22:57 +0000 Brian Thopsey 5673 at https://fundwisdom.com https://fundwisdom.com/article/brian-thopsey/institutional-investors-equity-crowdfunding-portals#comments https://fundwisdom.com/article/brian-thopsey/institutional-investors-equity-crowdfunding-portals#comments The Top 10 Equity Crowdfunding Portals 2019 https://fundwisdom.com/article/brian-thopsey/top-10-equity-crowdfunding-portals-2019 <span property="schema:name">The Top 10 Equity Crowdfunding Portals 2019 </span> <div property="schema:text" class="field field--name-body field--type-text-with-summary field--label-hidden field__item"><p>"<em>You're not going to get rich renting out your time. You must own equity - a piece of a business - to gain your financial freedom." </em><span style="font-size:9.0pt">Naval Ravikant</span></p> <p>For most of us investing in startup companies presents a challenge. The <a href="/article/brian-thopsey/non-accredited-investors-capitalize-access-private-equity">JOBS Act </a>didn’t democratize access to these exciting investments as promised. Several platforms have been built and are slowly improving access, but the overall market is tiny and challenges are abundant. Our research to rank the platforms may surprise you. </p> <p>At Fund Wisdom, we provide market insights so that investors, fund managers, entrepreneurs, and analysts can make informed decisions, accessing the best opportunities available. We have found that collecting and analyzing data in this space presents some unique challenges, unlike public equities that have solutions like Bloomberg, <a href="https://track.flexlinkspro.com/a.ashx?foid=1156697.41904108&amp;foc=1&amp;fot=9999&amp;fos=1" rel="nofollow" tabindex="-1" target="_blank">MarketXLS</a> and independent analysis like <a href="https://track.flexlinkspro.com/a.ashx?foid=1156697.141863100&amp;foc=1&amp;fot=9999&amp;fos=1" rel="nofollow" tabindex="-1" target="_blank">Motley Fool</a>. My goal is to share the research and data behind our ranking system of top equity <a href="/investors/platforms/equity-crowdfunding-investing-portals">funding portals</a> on a regular basis. Any feedback in the comments or direct <a href="/contact">contact</a> will go into the next ranked list we produce to continually improve.</p> <h2>Equity Investing Portal Market</h2> <p><a href="https://pitchbook.com/media/press-releases/us-venture-capital-investment-reached-1309-billion-in-2018-surpassing-dot-com-era">According to research from PitchBook</a>, in 2018 US Venture Capital reached $130.9 billion, and <a href="https://pitchbook.com/media/press-releases/record-unicorn-financings-drove-2017-total-venture-capital-investments-to-84-billion-the-largest-amount-since-dot-com-era">2017 was $84 billion</a>. While in all of the Americas equity crowdfunding is only 0.3 percent of that number according to the University of Cambridge’s Center for Alternate Finance. The Center produces a report on equity based funding and shares in <a href="/investors/platforms/equity-crowdfunding-investing-portals"> </a><a href="/investors/innovative-venture-reports/university-cambridge">2017 $260.9 million was funded</a> in the Americas.</p> <h2>Accredited Investing Portals and “Equity Crowdfunding”</h2> <p>If you’re one of the 92 percent of the US population that is not an “<a href="/investors/types/accredited-qualified-purchaser-investing">accredited investor</a>” and you look to invest in exciting new companies it may not be clear where to start and how to get involved. In a world of swirling stories of spectacular successes (and failures), a myriad of new investing portals, and a constantly changing landscape, it’s not always clear where to go and who to trust.</p> <p>Investing portals started out by serving only accredited investors. <a href="/platform/equitynet">Equitynet </a>was founded in 2005 and not long after rewards-based crowdfunding grew in popularity. Kickstarter was founded in 2009 and not long after dozens of equity-focused investing platforms started to appear. <a href="/platform/angellist">AngelList</a> was founded in 2010 and <a href="/platform/wefunder">Wefunder</a> in 2011, as a few examples. The creation of <a href="/about/jobs-act-title-iii">Title III in the JOBS Act</a>, in 2016, helped to provide access for non-accredited individuals to invest in a small set of offerings. The list of unaccredited portals and listings has since grown, so we break out our rank for accredited investing portals and non accredited regulated equity crowdfunding portals.</p> <h2>How We Built the List</h2> <p>The <a href="https://www.sec.gov/dera/data/crowdfunding-offerings-data-sets">US SEC EDGAR</a> database provides a centralized resource for public filing information. It provides transparency but the data is not quality controlled or organized, and no public government-funded reporting system currently exists. <meta charset="utf-8" />We built a database and identified others that provide information on how much money is moving through today’s equity portals.</p> <p>Different vendors, portals, analysts, and academics provide excellent insights and reports to compare our findings. Organizations such as <a href="https://www.crowditz.com">Crowditz</a>, <a href="https://www.startengine.com/blog/category/equity-crowdfunding-index/">StartEngine Index</a> and academic efforts such as the <a href="/investors/innovative-venture-reports/university-cambridge">University of Cambridge’s Center for Alternate Finance</a> were integral in performing this analysis.</p> <p>We're focused on equity crowdfunding and have excluded portals focused on debt (loans), real estate, and reward-based crowdfunding (like Kickstarter). Put simply, we're looking for the <meta charset="utf-8" />opportunities available to anyone to buy shares of a company, just like buying stock on an established exchange. We built a <a href="/investors/platforms/equity-funding-dashboard">dashboard to showcase our live data</a>.</p> <p dir="ltr" id="docs-internal-guid-2524bbb8-7fff-fa2c-cb7d-44d2bb90ae08">Additionally, we’re focused on opportunities in the United States. There is a large and growing equity crowdfunding market in the UK and Europe, Asia, and Latin America, and while we’re not there yet, we’re looking to eventually broaden our scope into these markets.</p> <h2>Top 10</h2> <p>We break our ranking out into 2 sections those focused on wealthy, accredited investors, and those that are focused on average retail investors that are not wealthy enough  to qualify as an “<a href="/investors/types/accredited-qualified-purchaser-investing">accredited investor</a>.” We look to rank based upon data in order to be less subjective than the other lists we have read. We will continue to add factors to this list as we test input and feedback like our 5 star system.</p> <h3>Unaccredited Equity Crowdfunding Portals</h3> <p><meta charset="utf-8" />What are the largest equity portals based on actually funded campaigns and equity crowdfunding statistics in 2018? The table below ranks the top 10 unaccredited equity crowdfunding portals based on campaigns funded in 2018.</p> <p> </p> <p><a href="/investors/platforms/equity-funding-dashboard"><img alt="2018 Top Equity Crowdfunding Sites, Platforms, Portals, Investing Engines" data-entity-type="file" data-entity-uuid="e0a4d26a-95f8-4e9d-9a8a-98d912f44def" src="/sites/fundwisdom.com/files/inline-images/2018-funding-ecf.PNG" style="width:600px;" class="autofloat-odd " /></a></p> <p> </p> <table align="left" class="Table" style="width:182.0pt; border-collapse:collapse; margin-left:6.75pt; margin-right:6.75pt; border:none" width="243"><tbody><tr style="height:16.0pt"><td nowrap="nowrap" style="border:none; border-bottom:solid windowtext 1.0pt; width:121.5pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="162"> <p style="margin:0in 0in 0.0001pt"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif"><b>Portal</b></span></span></p> </td> <td nowrap="nowrap" style="border:none; border-bottom:solid windowtext 1.0pt; width:60.5pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="81"> <p style="margin:0in 0in 0.0001pt"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif"><b>2018 Funded</b></span></span></p> </td> </tr><tr style="height:16.0pt"><td nowrap="nowrap" style="width:121.5pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="162"> <p style="margin:0in 0in 0.0001pt"><a href="/platform/wefunder"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif">Wefunder</span></span></a></p> </td> <td nowrap="nowrap" style="width:60.5pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="81"> <p style="margin:0in 0in 0.0001pt"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif">$25,800,000 </span></span></p> </td> </tr><tr style="height:16.0pt"><td nowrap="nowrap" style="width:121.5pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="162"> <p style="margin:0in 0in 0.0001pt"><a href="/platform/startengine"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif">StartEngine</span></span></a></p> </td> <td nowrap="nowrap" style="width:60.5pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="81"> <p style="margin:0in 0in 0.0001pt"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif">$17,900,000 </span></span></p> </td> </tr><tr style="height:4.5pt"><td nowrap="nowrap" style="width:121.5pt; padding:0in 5.4pt 0in 5.4pt; height:4.5pt" valign="bottom" width="162"> <p style="margin:0in 0in 0.0001pt"><a href="/platform/seedinvest"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif">SeedInvest</span></span></a></p> </td> <td nowrap="nowrap" style="width:60.5pt; padding:0in 5.4pt 0in 5.4pt; height:4.5pt" valign="bottom" width="81"> <p style="margin:0in 0in 0.0001pt"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif">$13,900,000 </span></span></p> </td> </tr><tr style="height:16.0pt"><td nowrap="nowrap" style="width:121.5pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="162"> <p style="margin:0in 0in 0.0001pt"><a href="/platform/republic"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif">Republic</span></span></a></p> </td> <td nowrap="nowrap" style="width:60.5pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="81"> <p style="margin:0in 0in 0.0001pt"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif">$8,100,000 </span></span></p> </td> </tr><tr style="height:16.0pt"><td nowrap="nowrap" style="width:121.5pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="162"> <p style="margin:0in 0in 0.0001pt"><a href="/platform/nextseed"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif">NextSeed</span></span></a></p> </td> <td nowrap="nowrap" style="width:60.5pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="81"> <p style="margin:0in 0in 0.0001pt"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif">$4,900,000 </span></span></p> </td> </tr><tr style="height:16.0pt"><td nowrap="nowrap" style="width:121.5pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="162"> <p style="margin:0in 0in 0.0001pt"><a href="/platform/microventures"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif">Microventures</span></span></a></p> </td> <td nowrap="nowrap" style="width:60.5pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="81"> <p style="margin:0in 0in 0.0001pt"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif">$4,400,000 </span></span></p> </td> </tr><tr style="height:16.0pt"><td nowrap="nowrap" style="width:121.5pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="162"> <p style="margin:0in 0in 0.0001pt"><a href="/platform/netcapital"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif">NetCapital</span></span></a></p> </td> <td nowrap="nowrap" style="width:60.5pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="81"> <p style="margin:0in 0in 0.0001pt"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif">$2,900,000 </span></span></p> </td> </tr><tr style="height:16.0pt"><td nowrap="nowrap" style="width:121.5pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="162"> <p style="margin:0in 0in 0.0001pt"><a href="/platform/fundanna"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif">Fundanna</span></span></a></p> </td> <td nowrap="nowrap" style="width:60.5pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="81"> <p style="margin:0in 0in 0.0001pt"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif">$2,300,000 </span></span></p> </td> </tr><tr style="height:16.0pt"><td nowrap="nowrap" style="width:121.5pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="162"> <p style="margin:0in 0in 0.0001pt"><a href="/platform/trucrowd"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif">TruCrowd</span></span></a></p> </td> <td nowrap="nowrap" style="width:60.5pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="81"> <p style="margin:0in 0in 0.0001pt"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif">$500,000 </span></span></p> </td> </tr><tr style="height:16.0pt"><td nowrap="nowrap" style="width:121.5pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="162"> <p style="margin:0in 0in 0.0001pt"><a href="/platform/growthfountain"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif">Growth Fountain</span></span></a></p> </td> <td nowrap="nowrap" style="width:60.5pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="81"> <p style="margin:0in 0in 0.0001pt"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif">$300,000 </span></span></p> </td> </tr><tr style="height:16.0pt"><td nowrap="nowrap" style="width:121.5pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="162"> </td> <td nowrap="nowrap" style="width:60.5pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="81"> </td> </tr><tr style="height:16.0pt"><td nowrap="nowrap" style="width:121.5pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="162"> <p style="margin:0in 0in 0.0001pt"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif"><b>Total:</b></span></span></p> </td> <td nowrap="nowrap" style="width:60.5pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="81"> <p style="margin:0in 0in 0.0001pt"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif"><b>$81,000,000 </b></span></span></p> </td> </tr></tbody></table><p><meta charset="utf-8" /></p> <p dir="ltr" id="docs-internal-guid-0e8a5603-7fff-6ddc-4dc0-d36173c83508">In 2018, the top three portals combined for 71 percent of the total funded by all portals, with Wefunder and StartEngine combined for just over half (at 54 percent) of the total, and Wefunder alone responsible for 32 percent of the market.</p> <p dir="ltr"> </p> <p dir="ltr">Note that the total amount raised ($81 million) in 2018 is close to the estimate provided by StartEngine in their publications about industry volumes, and it also corresponds to the industry data publicized by Crowdfund Capital Advisors. The commonality between the three sources gives us confidence that our data is, at least, roughly accurate. Also, for those wondering why some large and well-known portals like Fundable (which claims to have raised just over $500 million since they launched) are absent from this list, we remind you that we’re focused on the non-accredited market, and Fundable admits only accredited investors.</p> <p dir="ltr">Some portals hold funds in escrow during the funding process and may ultimately return funds to investors for several reasons. For this analysis, we look at assets raised for funded projects through online portals available to all investors.</p> <p dir="ltr" id="docs-internal-guid-ea2d30fa-7fff-30ff-e061-78061cfad0db">Sherwood Neiss of Crowd Capital Advisors did a great review mid-way through <a href="https://venturebeat.com/2018/06/09/todays-best-crowdfunding-platforms-by-the-numbers/">2018 of the industry and top providers along with Venture Beat</a>. This is particularly useful as he breaks down the number of deals funded and the success rate.</p> <h4>2019</h4> <table align="left" class="Table" style="width:164.6pt; border-collapse:collapse; margin-left:6.75pt; margin-right:6.75pt; border:none" width="219"><tbody><tr style="height:16.0pt"><td nowrap="nowrap" style="border:none; border-bottom:solid windowtext 1.0pt; width:84.6pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="113"> <p align="center" style="text-align:center; margin:0in 0in 0.0001pt"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif"><b><span style="color:black">Portal</span></b></span></span></p> </td> <td nowrap="nowrap" style="border:none; border-bottom:solid windowtext 1.0pt; width:80.0pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="107"> <p align="center" style="text-align:center; margin:0in 0in 0.0001pt"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif"><b><span style="color:black">2019 Funded</span></b></span></span></p> </td> </tr><tr style="height:16.0pt"><td nowrap="nowrap" style="width:84.6pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="113"> <p style="margin:0in 0in 0.0001pt"><a href="/platform/wefunder"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif">Wefunder</span></span></a></p> </td> <td nowrap="nowrap" style="width:80.0pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="107"> <p align="right" style="text-align:right; margin:0in 0in 0.0001pt"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif"><span style="color:black">$9,900,000 </span></span></span></p> </td> </tr><tr style="height:16.0pt"><td nowrap="nowrap" style="width:84.6pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="113"> <p style="margin:0in 0in 0.0001pt"><a href="/platform/startengine"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif">StartEngine</span></span></a></p> </td> <td nowrap="nowrap" style="width:80.0pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="107"> <p align="right" style="text-align:right; margin:0in 0in 0.0001pt"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif"><span style="color:black">$5,600,000 </span></span></span></p> </td> </tr><tr style="height:16.0pt"><td nowrap="nowrap" style="width:84.6pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="113"> <p style="margin:0in 0in 0.0001pt"><a href="/platform/republic"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif">Republic</span></span></a></p> </td> <td nowrap="nowrap" style="width:80.0pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="107"> <p align="right" style="text-align:right; margin:0in 0in 0.0001pt"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif"><span style="color:black">$3,100,000 </span></span></span></p> </td> </tr><tr style="height:16.0pt"><td nowrap="nowrap" style="width:84.6pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="113"> <p style="margin:0in 0in 0.0001pt"><a href="/platform/netcapital"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif">NetCapital</span></span></a></p> </td> <td nowrap="nowrap" style="width:80.0pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="107"> <p align="right" style="text-align:right; margin:0in 0in 0.0001pt"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif"><span style="color:black">$2,200,000 </span></span></span></p> </td> </tr><tr style="height:16.0pt"><td nowrap="nowrap" style="width:84.6pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="113"> <p style="margin:0in 0in 0.0001pt"><a href="/platform/seedinvest"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif">SeedInvest</span></span></a></p> </td> <td nowrap="nowrap" style="width:80.0pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="107"> <p align="right" style="text-align:right; margin:0in 0in 0.0001pt"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif"><span style="color:black">$1,700,000 </span></span></span></p> </td> </tr><tr style="height:16.0pt"><td nowrap="nowrap" style="width:84.6pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="113"> <p style="margin:0in 0in 0.0001pt"><a href="/platform/microventures"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif">Microventures</span></span></a></p> </td> <td nowrap="nowrap" style="width:80.0pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="107"> <p align="right" style="text-align:right; margin:0in 0in 0.0001pt"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif"><span style="color:black">$800,000 </span></span></span></p> </td> </tr><tr style="height:16.0pt"><td nowrap="nowrap" style="width:84.6pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="113"> <p style="margin:0in 0in 0.0001pt"><a href="/platform/nextseed"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif">NextSeed</span></span></a></p> </td> <td nowrap="nowrap" style="width:80.0pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="107"> <p align="right" style="text-align:right; margin:0in 0in 0.0001pt"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif"><span style="color:black">$400,000 </span></span></span></p> </td> </tr><tr style="height:16.0pt"><td nowrap="nowrap" style="width:84.6pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="113"> <p style="margin:0in 0in 0.0001pt"><a href="/platform/trucrowd"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif">TruCrowd</span></span></a></p> </td> <td nowrap="nowrap" style="width:80.0pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="107"> <p align="right" style="text-align:right; margin:0in 0in 0.0001pt"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif"><span style="color:black">$300,000 </span></span></span></p> </td> </tr><tr style="height:16.0pt"><td nowrap="nowrap" style="width:84.6pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="113"> <p style="margin:0in 0in 0.0001pt"><a href="/platform/fundanna"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif">Fundanna</span></span></a></p> </td> <td nowrap="nowrap" style="width:80.0pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="107"> <p align="right" style="text-align:right; margin:0in 0in 0.0001pt"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif"><span style="color:black">$200,000 </span></span></span></p> </td> </tr><tr style="height:16.0pt"><td nowrap="nowrap" style="width:84.6pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="113"> <p style="margin:0in 0in 0.0001pt"><a href="/platform/growthfountain"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif">Growth Fountain</span></span></a></p> </td> <td nowrap="nowrap" style="width:80.0pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="107"> <p align="right" style="text-align:right; margin:0in 0in 0.0001pt"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif"><span style="color:black">$0 </span></span></span></p> </td> </tr><tr style="height:16.0pt"><td nowrap="nowrap" style="width:84.6pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="113"> </td> <td nowrap="nowrap" style="width:80.0pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="107"> </td> </tr><tr style="height:16.0pt"><td nowrap="nowrap" style="width:84.6pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="113"> <p align="right" style="text-align:right; margin:0in 0in 0.0001pt"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif"><b><span style="color:black">Total:</span></b></span></span></p> </td> <td nowrap="nowrap" style="width:80.0pt; padding:0in 5.4pt 0in 5.4pt; height:16.0pt" valign="bottom" width="107"> <p align="right" style="text-align:right; margin:0in 0in 0.0001pt"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif"><b><span style="color:black">$24,200,000 </span></b></span></span></p> </td> </tr></tbody></table><p> </p> <p>The first three months of 2019 have a similar ranking, with Wefunder and StartEngine in the top two slots, but Republic has risen to third while SeedInvest has fallen to 5th. Volumes are up year-on-year however, with a little over $21 million raised in the first quarter of 2018 versus just over $24million in 2019. Should the higher volumes continue, 2019 could see non-accredited equity investment top $100million. We are building a <a href="/investors/platforms/equity-funding-dashboard">dashboard to view this analysis on a quarterly basis</a> and review further break outs of information we collect.</p> <p> </p> <p> </p> <p> </p> <h3> </h3> <h2> </h2> <h3>Accredited Equity Investing Portals</h3> <h4>2019</h4> <p>It is no longer possible to publicly access accredited investing offerings through portals as was historically possible. We were able to collect data across a broad set of platforms when this was the case so ranking these objectively becomes a challenge.</p> <p> </p> <p><a href="/investors/platforms/accredited"><img alt="Accredited top 10" data-entity-type="file" data-entity-uuid="ce08610a-622d-4a5b-9876-99a27c9c7165" src="/sites/fundwisdom.com/files/inline-images/accredited%20top10.JPG" style="width:300px;" class="autofloat-even " /></a></p> <p><a href="/investors/platforms/accredited">View our current list</a></p> <h4>Historical</h4> <p>Below is a table we built in 2015 to review accredited only funding portals, prior to Title III of the JOBS Act getting passed. Note though that this data is guiding but cannot be relied upon due to issues we detail in the report.</p> <p><img alt="" src="/sites/all/files/cfund//screen_shot_2015-02-04_at_10.04.29_am.png" width="400" class="autofloat-odd " /></p> <h2><a href="/article/brian-thopsey/online-venture-investing-data-and-analytics-2014-2015"><strong><img alt="" src="/sites/all/files/cfund//platforms_by_market_share.jpg" width="500" class="autofloat-even " /></strong></a></h2> <p>We share this <a href="/article/brian-thopsey/online-venture-investing-data-and-analytics-2014-2015">detailed analysis from 2014 - 2015</a> because at the time the information on funding rounds was much easier to gather as it was mostly public. We collected performance data across accredited focused portals.</p> <p dir="ltr" id="docs-internal-guid-4a2d208b-7fff-46e6-a5c4-a4792c087ce5">There are a number of challenges we faced trying to summarize funds raised by accredited equity portals. For example, money can be raised outside of the portal, but over time many portals referenced the entire round raised by the business, not just what was transacted online through the platform. We look to measure the impact the platform has on the investment process and separate that from traditional funding channels. We showcase a few examples below from our dashboard:</p> <p><a href="/investors/companies/old"><img alt="Companies Funded screenshot accredited" data-entity-type="file" data-entity-uuid="6acf6f0a-7cb1-42fc-b3fc-c7c324f844d2" src="/sites/fundwisdom.com/files/inline-images/old%20listings.PNG" style="width:500px;" class="autofloat-odd " /></a></p> <p><strong>External Ranks Referenced</strong></p> <ul><li><a href="https://www.thebalancesmb.com/top-biggest-equity-crowdfunding-sites-985234">The Balance's rank of top Equity Crowdfunding sites</a></li> <li><a href="https://www.moneycrashers.com/equity-crowdfunding-sites-investors-entrepreneurs/">Brian Martucci of MoneyCrashers top 10</a></li> <li><a href="https://www.merchantmaverick.com/the-7-best-equity-crowdfunding-sites-for-businesses-and-entrepreneurs/">Merchant Maverick's top 7 Equity Funding sites for Businesses</a></li> </ul><p><meta charset="utf-8" />Another area we’re providing further insights into is the investment funds or syndicates established by portals and the effects they have on the market. We’re working to uncover additional data to improve <a href="/investors/platforms">our accredited investment portal rank </a>soon.</p> <p> </p> <h2>Evolution of the Rankings</h2> <p style="margin:0in 0in 0.0001pt"><span style="font-size:12pt"><span style="font-family:&quot;Calibri&quot;,sans-serif">I</span></span>n the chart below, we plotted the percent market share that each platform held each month for the last 15 months (the 12 months of 2018 and the first three months of 2019).</p> <p><img alt="Equity Crowdfunding over time" data-entity-type="file" data-entity-uuid="b5beed52-5e49-4d7f-b827-a98cb3d867ed" src="/sites/fundwisdom.com/files/inline-images/equity-crowdfunding-overtime.png" style="width:800px;" class="autofloat-even " /></p> <p>Wefunder maintained a commanding lead, only raising less than StartEngine in November and January of 2018. Wefunder commands a large presence in the market. SeedInvest looks to have steadily lost market share, beginning in the second half of 2018. That share seems to have been taken up by StartEngine and, to a lesser extent, by Republic.</p> <p>Perhaps the anticipation of the merger of SeedInvest and Circle is responsible for Seedinvest's lost market share. Circle is one of the leading cryptocurrency firms. There is a possibility that once merged, the combined entities will have greater reach in both of their specialties, creating a true synergy. That has yet to be realized. Reportedly, SeedInvest will remain (at least for the time being) a separate entity focused on raising capital, presumably adding opportunities in the cryptocurrency space in time. However, mergers often have unexpected consequences, both good and bad.</p> <p>The equity crowdfunding market has been, and remains, dominated by Wefunder, StartEngine, and SeedInvest, with the three combining for just over 70 percent of the market in both 2018 and the first quarter of 2019. For non-accredited investors looking to buy equity, these are the portals with the volume, but that doesn't necessarily mean value.</p> <h2>Innovative Startup Investing 2019 and Beyond</h2> <p><em>“Three things cannot long be hidden: the sun, the moon, the truth” </em><span style="font-size:9.0pt">Paraphrasing of Buddha (Gradual Sayings, Volume I)</span></p> <p>In the US the <a href="/article/brian-thopsey/non-accredited-investors-capitalize-access-private-equity">JOBS Act</a> fell short of democratizing access to startup investments, but it created opportunities for a small set of individuals looking to capitalize on the potential startup companies can unlock. The creation of <a href="/investors/crypto">cryptocurrency </a>and companies that are building a network through blockchain technology offering a form of equity in coins have seen a far greater flow of capital. Many of the equity focused portals are offering crypto and several, like <a href="/platform/coinlist">Coinlist</a>, are specializing in Security Token Offerings. While the set of investments for non-accredited investors is currently small.</p> <p>We'll keep you updated on both the evolution of the overall equity crowdfunding market and our work to improve the data, find insights, and make startup equity investing more accessible. In the meantime let us know what you think in the comments below or <a href="/contact/">contact us direct</a>.</p> </div> <span rel="schema:author"><a title="View user profile." href="/users/brian-thopsey" lang="" about="/users/brian-thopsey" typeof="schema:Person" property="schema:name" datatype="">Brian Thopsey</a></span> <span property="schema:dateCreated" content="2019-11-03T21:52:19+00:00">Sun, 11/03/2019 - 16:52</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/investment-activity" hreflang="en">Investment Activity</a>, <a href="/tags/platforms" hreflang="en">Platforms</a>, <a href="/tags/retail-investors" hreflang="en">Retail Investors</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, 03 Nov 2019 21:52:19 +0000 Brian Thopsey 8642 at https://fundwisdom.com https://fundwisdom.com/article/brian-thopsey/top-10-equity-crowdfunding-portals-2019#comments https://fundwisdom.com/article/brian-thopsey/top-10-equity-crowdfunding-portals-2019#comments Global Equity Crowdfunding Platforms https://fundwisdom.com/article/brian-thopsey/global-equity-crowdfunding-platforms <span property="schema:name">Global Equity Crowdfunding Platforms</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//science-world-210775_640.jpg" class="autofloat-odd " /></p> <p>As global investing regulations have changed opening up access to equity offerings has created a fragmented market of platforms. Equity crowdfunding platforms are being created at a rapid rate making it challenging to build a resource to capture every single one. We built a comprehensive list of platforms, websites, digital properties, apps from all over the world below.</p> <p>We invite you to suggest platforms if we are missing any on the list in the comments below or <a href="/contact/">contacting us direct</a>. We also recognize several platforms have shut down since we first ran this list in 2015 and have created a separate listing for <a href="/investors/platforms/folded">those that have ceased operating</a>.</p> <h2>Americas Ratings, Data, and Research</h2> <p>At Fund Wisdom our focus is on Americas based funding platforms or portals. We review each portal we add into our database. We interview entrepreneurs and investors as we begin to partner with each. We detail some of the <a href="/article/naomi-garlick/equity-crowdfunding-risks-and-rewards">risks associated with platforms and the industry and why we do this</a>.</p> <ul><li><a href="/article/brian-thopsey/top-10-equity-crowdfunding-portals-2019">Primarily Americas focused platforms we have spoken to the founding team</a></li> <li><a href="/article/brian-thopsey/top-10-equity-crowdfunding-portals-2019">Rating of top 10 platforms</a></li> <li><a href="/investors/companies">Find and search companies raising money across platforms </a></li> </ul><h2> </h2> <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 is a list of equity crowdfunding portals from across the globe. We have a separate <a href="/investors/platforms">database of Americas based platforms</a> and efforts to <a href="/article/brian-thopsey/top-10-equity-crowdfunding-portals-2019">rank platforms via data and reviews</a>.</p> <table border="1" cellpadding="0" cellspacing="0" dir="ltr"><colgroup><col /><col /><col /><col /></colgroup><tbody><tr><td>afexios.com</td> <td> </td> <td>General</td> <td>France</td> </tr><tr><td>Angel.me</td> <td> </td> <td>Startups</td> <td>Belgium</td> </tr><tr><td>assob.com.au</td> <td> </td> <td>General</td> <td>Australia</td> </tr><tr><td>banktothefuture.com</td> <td> </td> <td>General</td> <td>United Kingdom</td> </tr><tr><td>broota.com/</td> <td> </td> <td>Startups</td> <td>Chile</td> </tr><tr><td>c-crowd.com</td> <td> </td> <td>General</td> <td>Switzerland</td> </tr><tr><td>CircleUp</td> <td>506B</td> <td> </td> <td>United States</td> </tr><tr><td>cloudfunded.com</td> <td> </td> <td>Small Businesses</td> <td>Delaware</td> </tr><tr><td>companisto.de</td> <td> </td> <td>Startups</td> <td>Germany</td> </tr><tr><td>craftfund</td> <td> </td> <td>Niche/Beer</td> <td>United States</td> </tr><tr><td>crowd2ipo.com</td> <td> </td> <td>General</td> <td>United Kingdom</td> </tr><tr><td>crowdahouse.com</td> <td> </td> <td>Niche/Real Estate</td> <td>United Kingdom</td> </tr><tr><td>Crowdbaron.com</td> <td> </td> <td>Niche/Real Estate</td> <td>Hong Kong</td> </tr><tr><td>crowdbite.co</td> <td>Real Estate</td> <td> </td> <td> </td> </tr><tr><td>Crowdbnk.com</td> <td> </td> <td>Startups</td> <td>United Kingdom</td> </tr><tr><td>crowdcapital.ca</td> <td> </td> <td>General</td> <td>Canada</td> </tr><tr><td>crowdinvest.co.za</td> <td> </td> <td>General</td> <td>South Africa</td> </tr><tr><td>crowdmii.com</td> <td> </td> <td>Startups</td> <td>Israel</td> </tr><tr><td>CrowdMission.com</td> <td> </td> <td>Niche/Social</td> <td>United Kingdom</td> </tr><tr><td>crowdmurex</td> <td> </td> <td>Niche/Real Estate</td> <td>Germany</td> </tr><tr><td>eureeca.com</td> <td> </td> <td>General</td> <td>United Arab Emirates</td> </tr><tr><td>Equitydoor.com</td> <td> </td> <td>Real Estate</td> <td>United States</td> </tr><tr><td>fundedbyme.com</td> <td> </td> <td>General</td> <td>Sweden</td> </tr><tr><td>FundARealty.com</td> <td> </td> <td>Real Estate</td> <td>United States</td> </tr><tr><td>fundinglaunchpad.com</td> <td> </td> <td>Startups</td> <td>United States</td> </tr><tr><td>fundrise.com</td> <td> </td> <td>Niche/Real Estate</td> <td>United States</td> </tr><tr><td>fundroom.com</td> <td> </td> <td>General</td> <td>United States</td> </tr><tr><td> </td> <td> </td> <td> </td> <td> </td> </tr><tr><td>fundthegap.com</td> <td> </td> <td>General</td> <td>United Kingdom</td> </tr><tr><td> </td> <td> </td> <td> </td> <td> </td> </tr><tr><td>fundyd.com</td> <td> </td> <td>General</td> <td>Netherlands</td> </tr><tr><td>gambitious.com</td> <td> </td> <td> </td> <td> </td> </tr><tr><td>gamcrowd.com/</td> <td> </td> <td> </td> <td>International</td> </tr><tr><td>globevestor.com/</td> <td>506 C</td> <td> </td> <td> </td> </tr><tr><td>go4funding.com</td> <td> </td> <td>Startups</td> <td>United States</td> </tr><tr><td> </td> <td> </td> <td> </td> <td> </td> </tr><tr><td>growthfunders</td> <td> </td> <td> </td> <td>International</td> </tr><tr><td>Gust.com</td> <td>506B</td> <td> </td> <td>United States</td> </tr><tr><td>healthfundr.com/contact</td> <td>506 C</td> <td> </td> <td> </td> </tr><tr><td>healthios -</td> <td>506B</td> <td> </td> <td> </td> </tr><tr><td> </td> <td> </td> <td> </td> <td> </td> </tr><tr><td>healthtechhatch.com</td> <td> </td> <td>Niche/Medical</td> <td>United States</td> </tr><tr><td>hyperfund.com/</td> <td>506 C</td> <td> </td> <td> </td> </tr><tr><td>ibankers.com/</td> <td>506 C</td> <td> </td> <td> </td> </tr><tr><td>ifunding.co</td> <td> </td> <td>Niche/Real Estate</td> <td>United States</td> </tr><tr><td>impacttrader.com</td> <td> </td> <td>Niche/Social</td> <td>United States</td> </tr><tr><td>implementix.com</td> <td> </td> <td> </td> <td> </td> </tr><tr><td>innovestment.de</td> <td> </td> <td>General</td> <td>Germany</td> </tr><tr><td>innovocracy.org/</td> <td> </td> <td>Niche/Innovation</td> <td>United States</td> </tr><tr><td>invertual.com</td> <td> </td> <td> </td> <td> </td> </tr><tr><td>invesdor.com</td> <td>506C</td> <td>General</td> <td>Finland</td> </tr><tr><td> </td> <td> </td> <td> </td> <td> </td> </tr><tr><td>investedin.com/</td> <td> </td> <td> </td> <td> </td> </tr><tr><td>investfashion.com</td> <td> </td> <td>Niche/Fashion</td> <td>United States</td> </tr><tr><td>Investiere.ch</td> <td> </td> <td>Startups</td> <td>Switzerland</td> </tr><tr><td>investingzone.com/pitches</td> <td> </td> <td> </td> <td>UK</td> </tr><tr><td>ipovillage.com</td> <td> </td> <td>General</td> <td>United States</td> </tr><tr><td>iravest.com</td> <td> </td> <td>General</td> <td>United States</td> </tr><tr><td>jct.com/</td> <td>506 C</td> <td> </td> <td> </td> </tr><tr><td>Joinvestor -</td> <td>Funds</td> <td> </td> <td> </td> </tr><tr><td>jumpstartfund</td> <td> </td> <td> </td> <td> </td> </tr><tr><td>localstake.com</td> <td>506 C</td> <td>Small Businesses</td> <td>United States</td> </tr><tr><td> </td> <td> </td> <td> </td> <td> </td> </tr><tr><td>lookandfin.com</td> <td> </td> <td>General</td> <td>Belgium</td> </tr><tr><td>maidenlane.com/</td> <td>Funds</td> <td> </td> <td> </td> </tr><tr><td>mashup-finance.de</td> <td> </td> <td>Startups</td> <td>Germany</td> </tr><tr><td>microventures.com/portfolio</td> <td>511 C</td> <td> </td> <td>United States</td> </tr><tr><td>movies-angels.com</td> <td> </td> <td>Niche/Film</td> <td>France</td> </tr><tr><td>mycofolio.com</td> <td> </td> <td>Small Businesses</td> <td>United States</td> </tr><tr><td>nxgencapital</td> <td>Real Estate</td> <td> </td> <td> </td> </tr><tr><td>OpenRound</td> <td> </td> <td> </td> <td> </td> </tr><tr><td>openround.cloudapp.net/</td> <td>506 C</td> <td> </td> <td> </td> </tr><tr><td>optimizecapitalmarkets</td> <td> </td> <td> </td> <td>Canada</td> </tr><tr><td>OurCrowd</td> <td>506B</td> <td> </td> <td>United States</td> </tr><tr><td>peoplesvc.com</td> <td> </td> <td>General</td> <td>United States</td> </tr><tr><td>pinkstart.me</td> <td> </td> <td>LGBT</td> <td> </td> </tr><tr><td>podiumfunds.com</td> <td> </td> <td>Private</td> <td>Canada</td> </tr><tr><td>Poliwogg</td> <td>506B</td> <td> </td> <td> </td> </tr><tr><td>portfolia.com/</td> <td> </td> <td> </td> <td> </td> </tr><tr><td>pushfunder.com</td> <td> </td> <td>General</td> <td>United States</td> </tr><tr><td>realtymogul.com</td> <td> </td> <td>Niche/Real Estate</td> <td>United States</td> </tr><tr><td>realtyshares.com</td> <td> </td> <td>Niche/Real Estate</td> <td>United States</td> </tr><tr><td>repse</td> <td>Real Estate</td> <td> </td> <td> </td> </tr><tr><td>rockthepost.com</td> <td> </td> <td>Startups</td> <td>United States</td> </tr><tr><td>SecondMarket</td> <td>Funds</td> <td> </td> <td> </td> </tr><tr><td>seedmatch.de</td> <td> </td> <td>Startups</td> <td>Germany</td> </tr><tr><td>seedrs.com</td> <td>506C</td> <td> </td> <td>International</td> </tr><tr><td>seeds.nl</td> <td> </td> <td>Startups</td> <td>Netherlands</td> </tr><tr><td>seedups.com</td> <td> </td> <td>Startups</td> <td>United States</td> </tr><tr><td>Sharepost</td> <td>Funds</td> <td> </td> <td> </td> </tr><tr><td>siamosoci.com/</td> <td> </td> <td>Startups</td> <td>Italy</td> </tr><tr><td>signup.crowdismo.com</td> <td> </td> <td>Niche/Ethnicity</td> <td>United States</td> </tr><tr><td>slated.com</td> <td> </td> <td>Niche/Film</td> <td>United States</td> </tr><tr><td>smartmarket.net</td> <td> </td> <td>Startups</td> <td>Russia</td> </tr><tr><td>sociosinversores.es</td> <td> </td> <td>Startups</td> <td>Spain</td> </tr><tr><td>solomoncrowd.com/</td> <td> </td> <td> </td> <td> </td> </tr><tr><td>sprowd.com</td> <td> </td> <td>Startups</td> <td>Netherlands</td> </tr><tr><td>startjoin.com</td> <td>506 C</td> <td> </td> <td> </td> </tr><tr><td>startupaddict.com</td> <td> </td> <td>Startups</td> <td>United States</td> </tr><tr><td>startupvalley.com</td> <td>506B</td> <td> </td> <td> </td> </tr><tr><td>sterlingfunder.com/</td> <td> </td> <td> </td> <td> </td> </tr><tr><td>swarmcorp.com/</td> <td> </td> <td> </td> <td> </td> </tr><tr><td>symbid.com</td> <td> </td> <td>Startups</td> <td>Netherlands</td> </tr><tr><td>syndicateroom.com/</td> <td> </td> <td> </td> <td>UK</td> </tr><tr><td>thechangexchange.org</td> <td> </td> <td>Small Businesses</td> <td>United States</td> </tr><tr><td>thecrowdangel.com</td> <td> </td> <td>Startups</td> <td>Spain</td> </tr><tr><td>thefoundersmarket.com/</td> <td>506 C</td> <td> </td> <td> </td> </tr><tr><td> </td> <td> </td> <td> </td> <td> </td> </tr><tr><td>thefundersclub.com</td> <td> </td> <td>Startups</td> <td>United States</td> </tr><tr><td>thehotstart.com/</td> <td> </td> <td> </td> <td>International</td> </tr><tr><td>thrillcapital.com</td> <td> </td> <td>Niche/Sports</td> <td>New Zealand</td> </tr><tr><td>trucrowd.com/</td> <td> </td> <td> </td> <td> </td> </tr><tr><td>uinvest.com</td> <td> </td> <td>Startups</td> <td>United States</td> </tr><tr><td>united-equity.de</td> <td> </td> <td>Startups</td> <td>Germany</td> </tr><tr><td>upandfunding.com</td> <td> </td> <td>Small Businesses</td> <td>United Kingdom</td> </tr><tr><td>venovate.com/</td> <td>506B</td> <td> </td> <td> </td> </tr><tr><td>venturebonsai.com</td> <td> </td> <td>Startups</td> <td>Finland</td> </tr><tr><td>wesparkt.com</td> <td> </td> <td>Niche/Social</td> <td>United States</td> </tr><tr><td>wiseed.fr</td> <td> </td> <td>Startups</td> <td>France</td> </tr><tr><td>wlcm.in</td> <td> </td> <td>Niche/Social</td> <td>Germany</td> </tr></tbody></table><p>From a Global perspective we recommend <a href="https://p2pmarketdata.com/p2p-equity-platforms-of-the-world/">P2P Market Data</a>. For a wide range with detailed reviews <a href="https://yieldtalk.com/crowdfunding-investment-websites">YieldTalk is another great source</a>.</p> <p>If you would like to add your platform to <a href="/investors/platforms">our database</a> or the list above let us know in the comments below or <a href="/contact/">contact us direct</a>.</p> </div> <span rel="schema:author"><a title="View user profile." href="/users/brian-thopsey" lang="" about="/users/brian-thopsey" typeof="schema:Person" property="schema:name" datatype="">Brian Thopsey</a></span> <span property="schema:dateCreated" content="2019-11-01T00:22:29+00:00">Thu, 10/31/2019 - 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> Fri, 01 Nov 2019 00:22:29 +0000 Brian Thopsey 1824 at https://fundwisdom.com https://fundwisdom.com/article/brian-thopsey/global-equity-crowdfunding-platforms#comments https://fundwisdom.com/article/brian-thopsey/global-equity-crowdfunding-platforms#comments Equity Funding Portals Risks and Rewards https://fundwisdom.com/article/brian-thopsey/equity-funding-portals-risks-and-rewards <span property="schema:name">Equity Funding Portals Risks and Rewards</span> <div property="schema:text" class="field field--name-body field--type-text-with-summary field--label-hidden field__item"><p>This is an update to an article originally published by Naomi Garlick in 2015.</p> <p>Equity crowdfunding started as an exciting development for opening access to invest in high growth startup companies with the potential for large returns. With the large returns come equal high risks. Risks are shared between the investors as well as the entrepreneurs. Small businesses now have an additional source of capital through the creation of <a href="/investors/platforms">online portals</a>, but challenges arise with selecting the right one. Investors continue to face the same risk of any venture investment with the high chance of total failure and losing everything. Services have been created to address each of these which we review in detail.<br />  </p> <p><img alt="Equity CrowdFunding Tag Cloud, startups, investors" src="/sites/all/files/cfund//crowdfunding_cloud_0.png" class="autofloat-odd " /></p> <h2>Overall Crowdfunding</h2> <p>Individuals can raise money through crowdfunding within several categories, the two most popular are donation and rewards based crowdfunding. Equity-based crowdfunding is lesser known but poses the greatest potential return to the investor. Donation and rewards based funding facilitate money movement from anyone, no matter who they are or how much money they make. However with equity-based crowdfunding, only accredited investors are allowed to invest in most equity offerings. <a href="/crowdfunding-investors/crowdfunding-investor-types">Accredited investors</a> are wealthy, or high net-worth, individuals who the Securities and Exchange Commission (SEC) deem capable to invest.</p> <h3>Equity Funding Portal Growth</h3> <p>Today anyone is able to invest a percentage of their income in exchange for a stake in the company. Equity Crowdfunding provides an opportunity for startups to raise capital while gaining insightful advisors. The portals help facilitate the startup's equity offerings to broader groups of investors. The Jumpstart Our Business (JOBS) Act, Title III was built to "bring Wall Street to Main Street" by allowing individuals to invest in private companies in exchange for equity. The law was believed to democratize the capital markets by creating a populist investing pool, but limitations in the US resulted in this dream falling short <a href="/article/brian-thopsey/global-equity-crowdfunding-platforms">compared to other countries</a>.</p> <p>Since the JOBS Act have been passed allowing for general solicitation of qualified offerings, Equity Crowdfunding has experienced growth, but not to the extent some believed, including myself. When compared with rewards-based or donation-based, equity-based Crowdfunding raises the most funds per project.</p> <p>President Barack Obama signed the JOBS Act into law in April 2012, and in 2016 title III was implemented. It has driven <a href="/investors/innovative-venture-reports/university-cambridge">$260.9 million in funding</a> in the Americas to help get startup companies off the ground by end of 2017. This is based on data from the University of Cambridge’s Center for Alternate Finance. <a href="https://pitchbook.com/media/press-releases/us-venture-capital-investment-reached-1309-billion-in-2018-surpassing-dot-com-era"> According to research from PitchBook</a>, in 2018 US Venture Capital reached $130.9 billion, and <a href="https://pitchbook.com/media/press-releases/record-unicorn-financings-drove-2017-total-venture-capital-investments-to-84-billion-the-largest-amount-since-dot-com-era">2017 was $84 billion</a>. That results in the Americas equity crowdfunding only totaling 0.3 percent of the overall venture funding space.</p> <h2>Rewards</h2> <p>The most obvious reward of using equity funding portals would be the greater access to capital it provides entrepreneurs and greater access to investors. AOL co-founder Steve Case recently sat down with Fox News and shared some of his thoughts on the future for entrepreneurs and the equity crowdfunding phenomenon. <a>Case told Fox News</a> that "we're beginning to see the benefits of crowdfunding as a means of leveling the playing field, so anybody with any idea, irrespective of where they are, have more of a shot. The seed capital to get started will increasingly come from these crowdfunding platforms, and then as entrepreneurs achieve some momentum, they can more readily connect with institutional investors to get expansion capital."</p> <h2>Risks</h2> <p>Risks regarding Equity Crowdfunding platforms will always exist. Many Equity Crowdfunding platforms themselves perform their own due diligence officiating those that list on their sites. Entrepreneurs can list their equity offering on the platform and, in exchange, the platform receives compensation either in up front fees or fees structured to the deal itself. When posting an equity offering, the entrepreneur must determine that both the platform and the investors are legitimate. Likewise when investing in an equity offering, the accredited investor must determine that both the startup company and the platform are legitimate. </p> <p>Online investment platforms have regulatory obligations to perform due diligence on the companies they allow to raise money.  This process to review the firms requesting access to capital can shield the portals from potential liabilities. </p> <h3>Risk Reduction Offerings</h3> <p>We at Fund Wisdom review platforms prior to adding them on our database while also partnering with a number of services to address these risks.</p> <p><a href="http://www.crowdcheck.com/" target="_blank">CrowdCheck</a> is 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 issuer, the investor and the intermediary."</p> <p>At Fund Wisdom we review platforms prior to working with them. We have chosen not to work with a few platforms due to their standards of vetting. We have chosen to not include Angel Investment Network, a UK-based platform that states they have "the largest database of investors worldwide" with "3,500 angel investors from the US and the remaining amount are spread across 22 other countries." This is due to the quality of offerings and compensation structure. Entrepreneurs report that upon creating a company profile they receive an email notification from AIN that a number of investors were interested in their equity offering. However, in order to be further connected with these investors, the entrepreneur must pay $99 to the platform, known as a "pay-to-pitch" policy. </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> <h3>Regulatory</h3> <p>Since online financing platforms provide limited information about the people involved in an investment deal, government agencies like the SEC, and FINRA, along with other service providers are working to eliminate these risks from the Crowdfunding world by providing transparency and security to both investors and entrepreneurs.</p> <h2>Conclusion</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>If you have any service providers or stories to share we are interested to hear. Please feel free to share in the comments below or <a href="/contact/">contact us</a>.</p> </div> <span rel="schema:author"><a title="View user profile." href="/users/brian-thopsey" lang="" about="/users/brian-thopsey" typeof="schema:Person" property="schema:name" datatype="">Brian Thopsey</a></span> <span property="schema:dateCreated" content="2019-10-03T21:45:37+00:00">Thu, 10/03/2019 - 17:45</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> Thu, 03 Oct 2019 21:45:37 +0000 Brian Thopsey 352 at https://fundwisdom.com https://fundwisdom.com/article/brian-thopsey/equity-funding-portals-risks-and-rewards#comments https://fundwisdom.com/article/brian-thopsey/equity-funding-portals-risks-and-rewards#comments Equity Crowdfunding Analysis H1 2019 https://fundwisdom.com/article/brian-thopsey/equity-crowdfunding-analysis-h1-2019 <span property="schema:name">Equity Crowdfunding Analysis H1 2019</span> <div property="schema:text" class="field field--name-body field--type-text-with-summary field--label-hidden field__item"><p>At Fund Wisdom we believe in the opportunity <a href="/investors/platforms">equity funding platforms</a> create by providing access to capital, investment opportunities, and transparency to previously opaque markets. We are building a <a href="/investors/platforms/equity-funding-dashboard">dashboard</a> for analyzing our database of investment offerings and in the process have discovered some interesting information.</p> <p>We review 2019 Equity Crowdfunding performance across Q1, Q2, then make comparisons to years past. This analysis involves internal data, external data, and reports. It encompasses both regulated public offerings and private offerings listed on American platforms. We also have a separate section that <a href="/article/brian-thopsey/top-10-equity-crowdfunding-portals-2019">ranks top 10 portals</a>.</p> <p>Since 2014 Fund Wisdom has been recording public offerings on platforms. To obtain this data, we manually reviewed info from public webpages on the equity crowdfunding <a href="/investors/platforms" tabindex="-1">platforms</a>. Then we recorded each listing in our own private database and ran regular updates. Findings were compiled into a detailed report: <a href="/article/brian-thopsey/online-venture-investing-data-and-analytics-2014-2015">We provide a summary</a> and a <a href="/sites/fundwisdom.com/files/fundwisdom2014dealreport.pdf">full PDF</a>.</p> <h3>Alternatives - Equity Crowdfunding</h3> <p>If you’re starting a business, often to get the business going, you need money upfront. Traditionally, the way to do this was to go to a bank, venture capital firms, or use your own money. When websites gained popularity, people started to use them to advertise their business needs, and ultimately get investment. What started as individuals aiming to get assistance to start their business, expanded so that individuals could also sell shares of their business. A term to help classify this industry developed, Equity Crowdfunding. There’s two major types of Equity Crowdfunding, accredited and non-accredited. Non-accredited is also known as Regulated Equity Crowdfunding. Only accredited investors were able to invest in businesses offering shares at an early stage, which limited opportunities for those who were not wealthy enough to qualify. Hence the term "private" equity within the alternative investment category.</p> <p> </p> <p><a href="https://www.ey.com/Publication/vwLUAssets/ey-2018-global-alternative-fund-survey/$File/ey-2018-global-alternative-fund-survey.pdf"><img alt="EY Investor allocations to alternatives" data-entity-type="file" data-entity-uuid="e90aec05-4394-49bc-bef2-f0c3f38de913" src="/sites/fundwisdom.com/files/inline-images/Alternative%20Investment%20Analysis.JPG" style="width:500px;" class="autofloat-odd " /></a></p> <p>Ernst &amp; Young (EY) <a href="https://www.ey.com/Publication/vwLUAssets/ey-2018-global-alternative-fund-survey/$File/ey-2018-global-alternative-fund-survey.pdf">surveyed more than 200 fund managers and 60 investors</a> to uncover the points of view of both hedge fund and private equity managers, as well as institutional investors who allocate to both asset classes as well as broadly across alternatives. Within the broader financial market Equity Crowdfunding represents a very small fraction of overall investment today.</p> <p>It wasn’t until 2016 that investment in small-business opportunities to generate capital were made available to unaccredited investors. This occurred with the JOBS Act, which is regulated and enforced by the Security and Exchange Commission (SEC). Now, when a small business or company wants non-accredited investment (or non-wealthy individual investors), they need to complete a form through the SEC. The information on that form goes into a database which the SEC oversees. Rather than pull manually from websites, Fund Wisdom “cleans” then analyzes the SEC data to look for various things like investment opportunities, and geographic variability of investments. Part of Fund Wisdom’s mission is to provide the data and analysis to investors, entrepreneurs, financial firms (with specialties in equity analysis), and more.</p> <h3>Improved Data</h3> <p>The <a href="https://www.sec.gov/dera/data/crowdfunding-offerings-data-sets">SEC filing data</a> presents a challenge to analyze due to the forms companies fill out consisting of free form entries. This results in challenges and discrepancies in available reports. So, we at Fund Wisdom built a process to standardize each listing to improve analysis. Our goal is to create more accurate reports for improving analysis and investment decisions.</p> <h3>Regulated Equity Crowdfunding</h3> <h4>2019 Regulated Crowdfunding Q1, Q2</h4> <p> </p> <p><a href="/investors/platforms/equity-funding-dashboard"><img alt="Regulated Equity Crowdfunding over time 2019 Monthly" data-entity-type="file" data-entity-uuid="5f367cbd-cd62-46e6-8893-e906274a9772" src="/sites/fundwisdom.com/files/inline-images/2019-ECF-chart.JPG" style="width:700px;" class="autofloat-even " /></a></p> <p> </p> <p><a href="/investors/platforms/equity-funding-dashboard/2019-offering-details"><img alt="2019 Equity Crowdfunding Comparison of Platforms" data-entity-type="file" data-entity-uuid="c097bf60-8f81-4c4b-a972-0b4316cf7ae0" src="/sites/fundwisdom.com/files/inline-images/2019-dataRECF_0.JPG" style="width:700px;" class="autofloat-odd " /></a></p> <p> </p> <p>StartEngine, WeFunder, and CrowdCaptial Advisors have written detailed reports on regulated equity crowdfunding data. The time intervals 2019 reports on the market make a side by side comparison more challenging than the analysis of historical reporting below. StartEngine provides monthly findings whereas Wefunder’s report was cumulative to April.</p> <h4>Historical 2016 to 2018</h4> <p>This chart highlights some of the side by side discrepancies we found and look to better understand.</p> <p><img alt="Equity Crowdfunding Analysis comparison of reports between Wefunder, StartEngine, CrowdCapital Advisors" data-entity-type="file" data-entity-uuid="ef9d7a4f-d25c-4ccc-b1db-2fef83a5c6a7" src="/sites/fundwisdom.com/files/inline-images/ECF-data-analysis.JPG" style="width:700px;" class="autofloat-even " /></p> <h4><a href="/article/brian-thopsey/top-10-equity-crowdfunding-portals-2019%3Cbr%20/%3E%26#10;"><img alt="2018 Equity Crowdfunding Comparison of Platforms" data-entity-type="file" data-entity-uuid="c097bf60-8f81-4c4b-a972-0b4316cf7ae0" src="/sites/fundwisdom.com/files/inline-images/2018-funding-ecf.PNG" style="width:500px;" class="autofloat-odd " /></a></h4> <h4>CrowdCapital Advisors</h4> <p>Sherwood Neiss is a partner at <a href="http://crowdfundcapitaladvisors.com/">Crowdfund Capital Advisors </a>and has published several detailed reports. The team there are also building a private beta dashboard to view their data. This visualization appears to be the best method of conducting detailed analysis to date but access is currently limited. Sherwood wrote a <a href="https://venturebeat.com/2019/01/30/regulation-crowdfunding-performed-solidly-in-2018-heres-the-data/">VentureBeat article</a> January 2019 to showcase some of the great work they are doing. He has been a lead advocate for the industry as a whole, and in the article he writes: "Not only does it engage local communities to become investors in local businesses, but it provides a viable alternative to traditional finance (i.e. credit card, bank loans and/or venture capital) that may not be available to these firms." He goes on to suggest a path forward, "The potential for Regulation Crowdfunding may be realized sooner if the <a href="https://venturebeat.com/2017/12/10/10-reasons-the-1-million-crowdfunding-cap-should-be-raised-to-20-million/">$1.07 million cap</a> were to be increased as well as certain recommendations implemented per <a href="https://www.crowdfundinsider.com/2018/07/136823-prominent-group-of-fintech-leaders-send-letter-to-sec-chair-jay-clayton-demanding-an-increase-in-regulation-crowdfunding-to-20-million/">an industry letter to the SEC</a>." I admire what the team has built and recommend signing up.</p> <h4>Wefunder</h4> <p>Jonny Price of Wefunder posted a detailed review and analysis on <a href="https://medium.com/@jonnyprice/regulation-crowdfunding-three-years-in-29766d0b80a2">Medium.com titled, Regulation Crowdfunding, Three Years In</a>. He goes into great detail of Wefunder performance, and starts with an industry overview. He shares cumulative investment in regulated offerings hit $207.6 Million, by April 2019, with Wefunder making up $70.5M of that. He also breaks down Wefunder specific data like industry, security type, and company performance.</p> <p>An important stat for entrepreneurs considering listing with platforms he mentions, typical founding teams raise 50% through the platform and the other half through direct relationships.</p> <h4>Crowditz</h4> <p>Crowditz provides a live stream of the latest regulated equity funding offerings. They also published an <a href="https://www.crowditz.com/category/funding-reports/">analysis every few weeks of industry performance</a>. I have not been able to find any data visualizations but assume they are soon to come.</p> <h4>StartEngine</h4> <p>Max Crawford of StartEngine releases a monthly report analyzing industry performance via <a href="https://www.startengine.com/blog/equity-crowdfunding-in-review-july-2019/">Crawford's July data</a> as well as <a href="https://www.startengine.com/blog/equity-crowdfunding-2018-review/">a yearly review</a>.</p> <h2> </h2> <h3>Accredited Equity Funding</h3> <p><img src="/sites/all/files/cfund//2014_investment_trends.jpg" style="width:700px" class="autofloat-even " /></p> <p><img alt="2014 Pie Chart of Regulated Equity Funding Portals break out" data-entity-type="file" data-entity-uuid="02a64b59-224a-4deb-89a3-7bb7c02824cf" src="/sites/all/files/cfund//platforms_by_market_share.jpg" style="width:700px;" class="autofloat-odd " /></p> <p>We built a <a href="/article/brian-thopsey/online-venture-investing-data-and-analytics-2014-2015">detailed report of data back in 2015</a>. The report provided a detailed view of the how the industry began prior to the addition of non-accredited investing. We are still working on providing access to this data with the dashboard, but the offerings can be seen in the <a href="/investors/companies">unfiltered table of offerings</a>. Around the 2016 time frame the accredited focused platforms began moving their equity listings that had been public behind a login which requires accredited investor verification. We therefor made the switch over to pulling in regulated SEC filing data.</p> <h4>University of Cambridge</h4> <p>The Judge Business School at University of Cambridge has been collecting <a href="/investors/innovative-venture-reports/university-cambridge">self reported figures direct from regulated and non regulated platforms</a>. On their latest report for 2017 (they are still working on 2018 data) they cover platforms like, <a href="/platform/fundable">Fundable</a>, <a href="/platform/circleup">CircleUp</a>, <a href="/platform/nextseed">NextSeed</a>, <a href="/platform/peer-street">PeerStreet</a>, <a href="/platform/republic">Republic</a>, <a href="/platform/seedinvest">Seedinvest</a>, <a href="/platform/startengine">StartEngine</a>, <a href="/platform/trucrowd">TruCrowd</a>, and <a href="/platform/wefunder">Wefunder</a>.</p> <div>The report covers the entire range of alternative finance. Focusing on Equity-based Crowdfunding platforms only, 2017 accounted for $260.9 million, down 54% from $569.5 million in 2016. Of that 21% was institutional funding. Of the platforms they surveyed 22% say they have data exchange agreements.</div> <p>We had a chance to connect with the team on their ambitious goal of becoming the data depository and hub of academic activity in the field of alternative finance. They look to cover online markets such as equity and reward-based crowdfunding, peer-to-peer consumer/business lending, and third-party payment platforms.</p> <p> </p> <h2>Conclusion</h2> <p>I don't believe the differences in reporting is intentional, but represents challenges with the sources. of SEC filing data described earlier. At the end of the day each team reaches the same conclusion, there is growth in the overall market. If proposals presented by the Crowd Capital Advisors team and others are implemented further growth is still to come. Several other countries including the UK implemented less regulatory restrictions that have allowed for greater investment activity.</p> <p>Opportunities to invest in firms and funds online are abundant, and the number will increase as solutions continue to be developed to improve the investment process across early stage and late stage initial public offerings. Title III of the Jump-start Our Business Startups (JOBS) Act has increased the amount of capital invested in equity online, but not the extent in the USA many believed, including myself. A majority of the population that is not able to invest now can but with serious restrictions. What are your thoughts on the industry, comment below or <a href="/contact/" tabindex="-1">contact us</a> direct.</p> </div> <span rel="schema:author"><a title="View user profile." href="/users/brian-thopsey" lang="" about="/users/brian-thopsey" typeof="schema:Person" property="schema:name" datatype="">Brian Thopsey</a></span> <span property="schema:dateCreated" content="2019-08-27T23:36:15+00:00">Tue, 08/27/2019 - 19:36</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> Tue, 27 Aug 2019 23:36:15 +0000 Brian Thopsey 9176 at https://fundwisdom.com https://fundwisdom.com/article/brian-thopsey/equity-crowdfunding-analysis-h1-2019#comments https://fundwisdom.com/article/brian-thopsey/equity-crowdfunding-analysis-h1-2019#comments Exchange Traded Crypto funds https://fundwisdom.com/article/brian-thopsey/exchange-traded-crypto-funds <span property="schema:name">Exchange Traded Crypto funds</span> <div property="schema:text" class="field field--name-body field--type-text-with-summary field--label-hidden field__item"><p>There are three types of funds available for investors interested in investing in cryptocurrency funds: Exchange-traded Funds, Private Investment Funds, and Hedge Funds. In this section we look at Exchange Traded Funds, where CoinShares dominates the market.</p> <h3>Exchange Traded Products</h3> <p>Exchange traded products are securities that are bought and sold on an established exchange. Exchange traded products can be either Exchange traded Funds (ETFs) or Exchange traded Notes (ETNs). ETFs are backed by the securities they hold (think of them like a mutual fund, which is just a structure to hold individual assets like stocks or currencies) while ETNs are notes issued by a company that uses the money raised to buy securities, in this case cryptocurrencies.</p> <p>ETNs have an additional layer of risk over ETFs because they are essentially loans to the issuer. And issuers running into trouble is not unprecedented: XBT Provider, the original issuer of cryptocurrency ETNs, had financial trouble, but luckily was bought up by Global Advisors and both firms were rebranded as CoinShares.</p> <h3>Lack of US Access</h3> <p>As of May 2019 there are no Exchange traded crypto focused products available in the United States. In August of 2018, the U.S. Securities and Exchange Commission (SEC) rejected nine bitcoin ETF proposals from large, firms like ProShares, Direxion, and others. The stated reason was because the SEC was unconvinced that the exchanges could prevent fraud or manipulative acts.</p> <p>As recently as May 20th of 2019 the SEC rejected the application of the VanEck/SolidX Bitcoin ETF. With this rejection, it seems unlikely there will be an SEC approved ETF available to U.S. investors anytime in 2019. Even more discouraging, the VanEck/SolidX proposal, in an attempt to reassure the SEC, set a minimum share price of $200,000 to discourage retail investors and attract more institutional funds. Unaccredited investors may have an even longer wait for an SEC-approved fund.</p> <h3>Global Crypto - Exchange Access Outside North America</h3> <p>U.S. citizens can invest in Exchange traded Products listed in non-U.S. exchanges. CoinShares lists their products on the Swedish exchange which can be accessed through a broker connected to Nasdaq Stockholm or the Nordic Growth Market. For experienced investors comfortable using an online broker and accessing foreign exchanges <a href="https://www.interactivebrokers.com/en/home.php">Interactive Brokers</a> offers an option to allow access to invest.</p> <p>We offer a <a href="/investors/funds/types/crypto">list of funds including CoinShares that provide access to this asset type.</a></p> </div> <span rel="schema:author"><a title="View user profile." href="/users/brian-thopsey" lang="" about="/users/brian-thopsey" typeof="schema:Person" property="schema:name" datatype="">Brian Thopsey</a></span> <span property="schema:dateCreated" content="2019-05-28T13:24:45+00:00">Tue, 05/28/2019 - 09:24</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/blockchain" hreflang="en">Blockchain</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, 28 May 2019 13:24:45 +0000 Brian Thopsey 8974 at https://fundwisdom.com https://fundwisdom.com/article/brian-thopsey/exchange-traded-crypto-funds#comments https://fundwisdom.com/article/brian-thopsey/exchange-traded-crypto-funds#comments Financial Advisory - Startup & Crypto: Limitations & Innovations https://fundwisdom.com/article/brian-thopsey/financial-advisory-startup-crypto-limitations-innovations <span property="schema:name">Financial Advisory - Startup &amp; Crypto: Limitations &amp; Innovations</span> <div property="schema:text" class="field field--name-body field--type-text-with-summary field--label-hidden field__item"><p>Interested in investing a portion of your long term savings or retirement into high growth startup companies at early stages? Several solutions have emerged to help provide access to these alternative assets, making it easier to invest, but working through existing financial relationships may prove challenging for some. </p> <p>Equity funding regulation and the rise of cryptocurrency held promise for open startup investment opportunities to all, no matter economic status. However, most who want to work with a professional financial expert to get help in selecting and managing a portfolio of early stage companies, or alternative investments, options are limited. Innovative investment platforms and funds are the first place to look for access.</p> <h2 style="line-height: 20.0063037872314px;"><img alt="" src="/sites/all/files/cfund//sea-67911_640.jpg" style="margin: 10px;" width="400" class="autofloat-odd " /></h2> <h3>Financial Advice Limitations</h3> <p>Most investment firms that have experience with alternative investments require you to be an <a href="/investors/types/accredited-qualified-purchaser-investing">accredited investor (wealthy as defined by the SEC)</a>, and there are few that will actively assist you in selecting individual investments unless the amount you have to invest far exceeds even the SEC standards.</p> <h4>Broker-Dealers:</h4> <p>Traditional investment brokers like Scottrade, TD Ameritrade, <a href="http://www.kqzyfj.com/click-7643827-13718994" target="_top">Mintbroker</a><img border="0" src="https://www.tqlkg.com/image-7643827-13718994" class="autofloat-even " />, Charles Schwab, Vanguard, and E-trade provide access to public equity, debt, and funds that include mostly mature large companies. Access to higher risk alternative assets like early stage companies are limited through these channels so we explore other avenues. </p> <h4>Registered Investment Advisors</h4> <p><a href="https://www.financial-planning.com/news/few-financial-planners-see-cryptocurrencies-as-a-viable-investment-option-fpa-survey">Ravie Lakshmanan of FinancialPlanning.com writes </a>RIAs: “a mere 2% of financial planners view cryptocurrencies as a viable investment option.”</p> <p>Merrill Lynch and Morgan Stanley have “banned their brokers from recommending bitcoin and refuse to trade the instrument.”<a href="http://www.financialadvisoriq.com/c/2021393/236283/many_rias_refuse_anywhere_near_bitcoin"> according to Financial Advisor IQ author Bruce Love</a>. He goes on to write, “Most RIAs won’t let their clients anywhere near cryptocurrencies. And there’s a crucial legal reason why RIAs would be hard-pressed to let their clients invest in bitcoin: It might not be fiduciarily responsible. Under their fiduciary duty, putting their client’s best interests first, many RIAs think cryptocurrencies are far too risky for most retail investors.”  SEC Chairman Jay Clayton told CNBC the U.S. regulator would not be defining cryptocurrencies as securities anytime soon – a move which would allow RIAs to actively trade the instruments.</p> <h3>Robo Advisors</h3> <p>If you are looking for ways to automate your investing and re-balancing process robo advisors offer an option with the benefit of often times lower fees. Many offer tax-loss harvesting, and access to financial planners and advisors. There are companies that solely offer robo advisory and many of the dealers above have started adding this as a service to their broad portfolio. <a href="https://track.flexlinkspro.com/a.ashx?foid=1156697.138832797&amp;foc=1&amp;fot=9999&amp;fos=1" rel="nofollow" target="_blank">Wealthsimple </a>is a robo advisor based in Canada<a href="https://track.flexlinkspro.com/a.ashx?foid=1156697.138832797&amp;foc=1&amp;fot=9999&amp;fos=1" rel="nofollow" target="_blank">.</a> They offer <a href="https://track.flexlinkspro.com/a.ashx?foid=1156697.138832797&amp;foc=1&amp;fot=9999&amp;fos=1" rel="nofollow" target="_blank">low fees, and automated investing</a>. Most though still do not offer access to early stage startup equity.</p> <h3>Fees</h3> <p>Economics of advisory is a likely cause for so few certified professionals dedicated to startup equity investing. Advisors are typically paid an annual fee based on total assets invested. With a 0.5% (50 bps) fee, a $50 million client will make the advisor around $250,000 a year, while a $500,000 client will make the advisor $2,500. At $2,500 revenue per client, It would take 40 clients to earn $100,000 in revenue. One good financial advisor might be able to advise and manage 40 clients, but assuming overhead costs are at least 50%, that leaves $50,000 per year to pay the advisors salary.</p> <p>Portfolio management theory is just as important as the reality of fees. Registered investment advisors (RIAs) have a fiduciary responsibility to their clients. They cannot allow the investor to be overly concentrated in one investment, particularly risky ones. Thus, they follow the traditional theory which says that any allocation to “alternative investments” must be small, say a maximum of 10% of a client’s investable assets. An unaccredited investor has a legal cap to the amount they can invest in alternatives per year.</p> <p>Considering the mechanics above and specialty expertise required to provide professional advice we believe it these factors drastically reduce the number of alternative specialists. We look to showcase specialists covering startup equity and cryptocurrencies so appreciate any suggestions or feedback in the comments.</p> <h2>Going It Alone</h2> <p>The economics of asset management explained above reveal why even accredited investors will often have to go it alone when it comes to choosing alternative investments. Assuming you are going to have to go at this alone we have compiled a list of portals and funds to review.</p> <p> </p> <h3 style="line-height: 20.0063px;">Funding Portals &amp; Funds</h3> <p>We list, rank, analyze, and review <a href="/investors/platforms">innovative startup equity and crypto investing portals</a> and <a href="/investors/funds">funds.</a></p> <p>There are three types of funds available for investors interested in investing in alternative funds: Exchange-traded Funds, Private Investment Funds, and Hedge Funds. We highlight some of the most well-known, experienced, and professional providers. Of note, buying a fund puts the responsibility for managing the investments on the fund manager. It also makes the fund manager responsible for all transaction costs and custodial costs.</p> <p> </p> <h3>Tax Incentives</h3> <h4>Self-directed Retirement Plans:</h4> <p>In order to gain tax efficiency with your investments retirement accounts are a great resource and self directed plans are a great resource for going it alone and gaining access to these high risks investments. SEC and IRS rules govern what can go into an Individual Retirement Accounts (IRA), and most IRA managers want, or require, you to invest in their own products. For example, an account managed by Vanguard will allow you to allocate your retirement savings into Vanguard funds. A self directed IRA can allow you control, because you take the fiduciary responsibility away from the manager — you are the manager.</p> <p>There are numerous organizations, typically Trust companies, that manage the mechanics of investment accounts on behalf of others. While traditional Registered Investment Advisors (RIAs) can make money off the fees charged by the assets they manage, the fee structure in a self directed account without an advisor are often lower.</p> <p>Goldstar and Rocket Dollar offers self-directed tax incentivized accounts. Companies that provide self-directed retirement accounts like IRAs are usually experts in managing the account itself. Additionally, management of custodial services required for the assets you hold and assistance with choosing among possible investments may be covered in self-directed RIAs. These services are paving the way for individuals to invest in startups through these investment vehicles through self-directed IRA accounts that allow for investing in debt and equity through online portals. They have created accounts to help facilitate these transactions.</p> <p><a href="http://www.rocketdollar.com?utm_campaign=Fund%20Wisdom&amp;utm_source=Fund%20Wisdom&amp;utm_medium=Affiliates" tabindex="-1">RocketDollar - Self Directed IRA and 401k</a>s enable you to invest in any asset class allowed by the IRS. Invest securely and easily in Real Estate, Startups, and more.<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_1542170793193741" style="">"Rocket Dollar helps you unlock your old 401(k)s and IRAs to tap as a new source of capital. You can continue to enjoy the tax benefits of retirement accounts while diversifying your portfolio to invest in alternative asset classes such as startups and real estate."</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_1542170793193741" style=""> shreas Matt Silk the CEO of TMW Capital.</span></p> <p>We spoke with Josh Duckworth the Director of Marketing at <a href="https://www.goldstartrust.com/?AspxAutoDetectCookieSupport=1">GoldStar Trust about how they offer this</a>. Gold Star Trust charges 25$ to create an IRA account and $65 per year to maintain the account. In addition to self-directed IRAs, Gold Star Trust offers a solution for escrow and payment services with fees starting at $500 per deal. Their recent launch of <a href="http://www.crowdpay.com/" target="_blank">CrowdPay</a>, escrow, payments, custody and tax reporting services can be done via API (Application Programming Interface).</p> <p> </p> <h2>Startup &amp; Crypto Innovations</h2> <p>I hope you find our list of <a href="/investors/platforms">innovative startup equity and crypto investing portals</a> and <a href="/investors/funds">funds</a> helpful. While there are limitations to accessing financial advice in this risky space, there are continual changes and improvements through technology that we look to showcase. We appreciate any feedback and input in the comments below.</p> </div> <span rel="schema:author"><a title="View user profile." href="/users/brian-thopsey" lang="" about="/users/brian-thopsey" typeof="schema:Person" property="schema:name" datatype="">Brian Thopsey</a></span> <span property="schema:dateCreated" content="2019-05-27T15:32:07+00:00">Mon, 05/27/2019 - 11:32</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/blockchain" hreflang="en">Blockchain</a>, <a href="/tags/tax" hreflang="en">Tax</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, 27 May 2019 15:32:07 +0000 Brian Thopsey 5515 at https://fundwisdom.com https://fundwisdom.com/article/brian-thopsey/financial-advisory-startup-crypto-limitations-innovations#comments https://fundwisdom.com/article/brian-thopsey/financial-advisory-startup-crypto-limitations-innovations#comments