Early Investing

Startups Are Ready for Private Equity Crowdfunding

Startups Are Ready for Private Equity Crowdfunding
By Vin Narayanan
Date November 3, 2018

I just spent a week in Las Vegas talking to founders of fintech startups. Their stories were startlingly similar.

They had all come up with new ways to disrupt the financial industry. They had spent the last couple of years bootstrapping as they turned their ideas into minimum viable products. They had all received positive feedback from the market. They were ready to scale up and move into production.

And they all needed investors.

I asked these founders whether they had ever heard of private equity crowdfunding. Every single one of them said no.

Think about that for a minute. These founders, who are as sharp as they come, didn’t know a thing about crowdfunding startups.

So I explained it to them. I talked about how, at the early stages, they didn’t need to rely on venture capital (VC) companies to grow. I talked about how they could approach retail investors – just like you – to raise money.

We talked about how they could reach out to these investors to buy their shares, similar to a VC buying shares – only they would retain more control of their companies. I told them how many of you could then become their first customers and advocates for them by doing it this way…

And we talked about how important it was for investors just like you to invest in the next Amazon or Google.

I’d love to tell you that these founders were jumping for joy at the end of this conversation. But that’s not what happened.

Instead, they were angry.

All of them had financial advisors they trusted. Yet none of those “trusted” financial advisors had told them that private equity crowdfunding was even a possibility.

They really got it. They immediately understood the power of private equity crowdfunding. They were ready to break out from Silicon Valley’s stifling VC environment. And they were angry that they hadn’t known they could do it.

Some of these companies will likely join the private equity crowdfunding revolution. They’ll show up on MicroVentures, Republic, SeedInvest, Wefunder and other crowdfunding portals looking for investors.

Retail investors will have a chance to invest in the next Google or Amazon. And we’ll all be better for it.

That’s the democratization of investing at work.

This experience also reinforced our mission at Early Investing. We need to be advocates for you, our members.

We need to make sure that you have access to the best companies, ideas and founders to invest in.

We also need to make sure that the best founders and startups know about private equity crowdfunding, that they understand just how powerful it is and that they choose you instead of soulless VC firms to invest in them.

We need to actively connect startups with crowdfunding portals and investors. And we need to help improve the crowdfunding rules so companies can raise more money than they’re allowed to now.

Early Investing isn’t just an investment strategy. It’s a movement that we’re all a part of now. We’re democratizing investing.

That’s a mission worth getting behind.

P.S. This will be the last full column devoted to my travels. The usual News Fix will return next week.

Top Posts on Early Investing