March 21, 2016
Imagine that you keep $1000 to $5000 aside every year so that you can invest in stock markets directly or through other instruments to pick a small stake in a listed company. On the other hand you have been recently tracking these 5 startups and couple of teams impressed you a lot (happens a lot these days right? you can perhaps, thank LTP). Now, you think that 2 of these 5 startups have great potential as you understand the space. If there is an option for you to invest $100 to $1000 in these startups would you do that? if they are on one of the Equity Crowdfunding platforms mentioned in our article below which makes the whole process super easy? Many VPs and Presidents at large to mid-size companies are already doing this.
Let’s start with the basics and then review the market, regulations and major players in the equity crowdfunding market
1. Definition of Equity Crowdfunding
"Equity crowdfunding is a form of investing that involves many individuals investing online in a business in return for share capital, whether through a dedicated equity crowdfunding platform or independently organized by the company itself - according to the research done by Nesta along with some universities.
For the sake of completeness, let me also say that its roots are in Crowdfunding. Crowdfunding is a way for businesses or other organizations to raise money in the form of either donations or investments from multiple individuals, e.g., Kickstarter. This new form of capital formation emerged in the wake of the 2008 financial crisis.