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Is this a good way to invest?

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FauxPas

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No this is not the stock market. I'm talking about investing in private companies through equity crowdfunding.
 

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Ismail941

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I would take time to do some research and analysis to back up my best probable case scenario & hypothesis. I would not blindly invest.
Yes most likely if the numbers add up in the correct way like getting a slice of a pie in %, not the whole
 

MJ DeMarco

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Yes, but it is highly risky and could take YEARS to see any returns.

I have minor ownership in some small companies, but have yet to see any dime of return from it.

In my view, it is truly more of speculative thing, than a true investment.
 

socaldude

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Yes, private equity can be fastlane. But we are talking about big barriers to entry. Where are you gonna get the $20 million in net worth?

The people who I know that do this take control of the board of directors and leverage strategic partnerships. And it’s usually very specialized fields like biotech.

Big money is made because there is a massive allocation of resources like skills and big money. Someone taking their coronavirus stimulus check and investing it in some crowdfunded chotchki product is kind of a tough thing because because you are really not creating a whole lot of value other than hoping it’s a hit.

Warren Buffett was pretty much a private equity investor. He didn’t get rich buying lotto stocks on his Robinhood account drinking a gallon of coke a day.

Think in terms of centralized and specialized allocation of resources and creation of utility and it starts to make sense why someone can turn $10 million into $500 million in a private equity deal.
 

FauxPas

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Yes, private equity can be fastlane. But we are talking about big barriers to entry. Where are you gonna get the $20 million in net worth?

The people who I know that do this take control of the board of directors and leverage strategic partnerships. And it’s usually very specialized fields like biotech.

Big money is made because there is a massive allocation of resources like skills and big money. Someone taking their coronavirus stimulus check and investing it in some crowdfunded chotchki product is kind of a tough thing because because you are really not creating a whole lot of value other than hoping it’s a hit.

Warren Buffett was pretty much a private equity investor. He didn’t get rich buying lotto stocks on his Robinhood account drinking a gallon of coke a day.

Think in terms of centralized and specialized allocation of resources and creation of utility and it starts to make sense why someone can turn $10 million into $500 million in a private equity deal.
Well I'm talking about the average person investing some of their money on to the side in an equity crowdfunding platform like Wefunder. The SEC limits how much you can invest in such a campaign based off of your income. This allows you to invest into a private company without being an accredited investor.
 

socaldude

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Well I'm talking about the average person investing some of their money on to the side in an equity crowdfunding platform like Wefunder. The SEC limits how much you can invest in such a campaign based off of your income. This allows you to invest into a private company without being an accredited investor.

Yes it’s possible. Anything is possible.
 

WestCoast

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I personally don't touch these sort of things. My best ROI is investing in myself and my businesses.

That said, I've given seed money to two small businesses, and - MJ said it best - it's not investing, it's speculating.
(and I'm not a good speculator it would appear...)

I *think* the idea here is that you take $1000 and divide it into 10 investments.
You know 6 will go bust.
3 will maybe break even.
and you are hoping that 1 hits the jackpot.

That is sort of the SoftBank/VC route.
Lots of little bets, knowing most will lose. But, then you hope you hit a Snowflake and it that makes you look like a hero, even though the other 9 didn't work out.

--
I'd personally never try to pick one or two small companies I didn't control, to invest in.
It seems like trying to pick two stocks for your entire equity portfolio.
That doesn't sound like a sound/logical investment strategy to me.
 

FauxPas

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Yes it’s possible. Anything is possible.

I personally don't touch these sort of things. My best ROI is investing in myself and my businesses.

That said, I've given seed money to two small businesses, and - MJ said it best - it's not investing, it's speculating.
(and I'm not a good speculator it would appear...)

I *think* the idea here is that you take $1000 and divide it into 10 investments.
You know 6 will go bust.
3 will maybe break even.
and you are hoping that 1 hits the jackpot.

That is sort of the SoftBank/VC route.
Lots of little bets, knowing most will lose. But, then you hope you hit a Snowflake and it that makes you look like a hero, even though the other 9 didn't work out.

--
I'd personally never try to pick one or two small companies I didn't control, to invest in.
It seems like trying to pick two stocks for your entire equity portfolio.
That doesn't sound like a sound/logical investment strategy to me.
Well this won't exactly be my main of trying to build my wealth. A business that I own and control will, however that won't be the only thing I'll do either. I'll use multiple methods so greatly explode my odds of succeeding however way it happens.
 

alexkuzmov

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No this is not the stock market. I'm talking about investing in private companies through equity crowdfunding.
It could work out.
If you have control and know the industry you are investing in, your chances to recover the investment will be greater.
It sounds like you want to do some passive investment though.
Give someone, that you dont know, money and hope they succeed in a few years?
 

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