Invest in Startup Companies
Investing in individual companies can be done through funding platforms like the ones we cover provides direct access to investing in firms equity and debt. We keep track of the costs of using each platform. We also provide market insights into what is occurring in the funding space.
Invest in Funds
Investing in startup focused funds ideally lowers risk due to diversification created by investing in more than one company at once. With this benefit usually comes fees which can cut into your return on investment. Learn more >
Build a Fund
Costs of building startup funds or syndicates are being driven down. This is currently possible for accredited investors to do so we assume non accredited investors will be able to do the same but no platform has explicitly stated this yet. Learn more about how to and costs of creating funds >
Invest in Offerings in your State
Some states had passed laws to allow investment within their borders which has become more accessible than the federal laws. Some states have progressed investing for nonaccredited or unaccredited individuals beyond federal laws. This has been termed Intrastate Equity Crowdfunding and allows an unlimited number of nonaccredited investors if the entrepreneur is in the same state and follows the new laws in structuring the offering.
It is possible to invest in a company that is listing equity in that state, but none of the platforms or portals we work with separate these offerings out yet. However we are aware of the following portals that specialize in intrastate offerings:
- Michigan Founders
- Texas NextSeed
- Texas MassVenture
- Arizona Collaboratory
- Contact us to add to this list
Below is the status of each state
- Allowed: Alabama, Alaska, Arkansas, Arizona, Colorado, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Montana, Nebraska, New Jersey, New Mexico, North Carolina, Oregon, South Carolina, Tennessee, Texas, Vermont, Virginia, Washington, West Virginia, and Wisconsin
- In progress: Missouri, Nevada, New Hampshire, New York, California
- Rejected: Utah
Friends and Family
Other ways non accredited investors gained access to these investments were if they were friends and family of the team raising capital which allows for a limited set of unaccredited investors. If you qualify as a friend or family member of an entrepreneur you can invest in their company. There is a limit on the entrepreneur to only allowing 35 nonaccredited investors. Massachussets limits this to only 10. New York, Massachusetts, and California have a blue sky law that does not require the founder to file expensive legal paperwork, while other states this is a requirement for the firm raising.
How much am I allowed to invest?
An Accredited Investor has no limits. If you are not accredited, the amount you may invest each year in startup private equity offerings, will be between 5% and 10% of your income. In order to understand the amount you can investment there are a few steps. One choose either your net income or net worth, whichever is higher. If the higher number is over $100,000, you are allowed to invest 10% of it each year. If it below $100k you only invest 5%. For instance, if your income is $82,000 and your net worth $120,000, you'd be legally allowed to invest $12,000 per year in startups. We suggest consulting with a lawyer to ensure you are complying with the law.
Trading and Cashing Out
Investings as a Non-U.S. Citizen