Why does the majority find it difficult to invest in private companies?

BaseCore
BaseCore
Aug 31, 2018 · 2 min read

There are several reasons:

First and foremost, there is a lack of information, a kind of information vacuum, concerning those companies which are not on the stock exchange and do not hold stocks. In order to invest in such a company, it is necessary to collect qualitative and trustworthy information about the company, including its financial condition, investment conditions, forth coming qualified rounds of financing, and business in general.

Second, the lower threshold of the investor’s entrance is often beyond the means of an ordinary American. For a professional investor, for whom $5,000 is a trivial amount of money, participation is easy and likely. They would not be frightened by gambling this money. However, for the everyday farmer or office worker, this amount of money is quite large, and one would not be able or likely to afford taking such a step. This raises the question of possible fragmentation of entrance.

Third, competent legal assistance is a rather expensive luxury that not everyone can afford. Examination of all aspects independently would require much time and effort, and seeking professional help is rather expensive. This reduces the possible level of investment.

Fourth, all VC (Venture Capital) investments possess potentially huge opportunities, but they put you in a rigid framework at the same time. Generally, contracts are concluded for a certain period of time, and one can face a number of difficulties that entail loss of capital and fines if there is a need to quickly withdraw the investment.

Fifth, the transaction value can be very high, in some cases almost equal to the amount of investment.

The solution to all the above challenges is the electronic exchange platforms for tokenized assets.

bscrinc

BASECORE - trading platform for exchanging security token.

BaseCore

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BaseCore

bscrinc

bscrinc

BASECORE - trading platform for exchanging security token.

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