Investing in companies you know is one of the guiding principles of billionaire and investing legend Warren Buffet.
Buffet famously says “never invest in a business you cannot understand” and you should stick to companies you’re familiar with because “risk comes from not knowing what you are doing”.
It’s the reason why hundreds of investors buy into popular brands such as Apple, Amazon and Australia’s major banks. But in many cases, investors are just a number to a corporation already well on its business track.
But not every company takes the stock market route; more and more of them are turning to their loyal fans and community to power their growth. That is what equity crowdfunding is, and it’s fast becoming one of the top ways for early-stage ventures to grow capital.
How does it work?
Equity crowdfunding is a type of investment strategy using securities, where a founder will issue the public shares in their company in exchange for an investment. Supporters believe it is democratising traditional investing by making investing in start-ups and early-stage businesses accessible to everyone.
It differs from other forms of crowdfunding: US-based Kickstarter, for example, is a crowdfunding platform enabling users to invest in a start-up in exchange for that start-up’s product on first release. Donation platform GoFundMe asks investors to donate funds, usually for a cause, with no expectation of a return.
With equity crowdfunding, start-ups and small to medium enterprises have an opportunity to raise capital while the public gets to invest in something they are passionate about.
From beer to travel
Bu hikaye Money Magazine Australia dergisinin May 2023 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Giriş Yap
Bu hikaye Money Magazine Australia dergisinin May 2023 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Giriş Yap
An outrageous, beautiful monopoly
Telstra's mobile business is a cash machine with few competitors, giving it the highest returns in the world.
Drop the anchor to judge value
Buying and selling decisions should be based on where a stock price is going, not where it has been.
Powering the AI boom
Beyond the software and chipmakers, where will the energy come from?
Get into life
Tucked inside super are products that can protect you from life's inevitable uncertainties.
Paths to home ownership
Taking the road less travelled can sometimes deliver unexpected benefits.
Sold! Quick ways to add value
Small, strategic changes can have a big impact on the look and feel of your home. And get you a better price on auction day.
Money lessons the kids need to know
Your children can learn a lot from your past money mishaps. Here are eight financial conversations I have had with mine.
Property-investing rules: are they likely to change?
The pressure for the government to curb the tax benefits of tax concessions, such as negative gearing and the capital gains tax discount, is unrelenting. Most recently, independent senators David Pocock and Jacqui Lambie proposed five options for paring back investment property tax concessions, with savings to the Federal budget of up to $60 billion over the next decade.
What's love got to do with it?
A rollercoaster of emotions could be driving poor crypto behaviour.
Are we ready to be cash-free?
Saying goodbye to our piggy banks too soon could leave small businesses in the dark when problems arise.