Keep your hands off my syndicate!
It’s time to talk about crowdfunding…
No! Not taking a bunch of money and lighting it up.
I’m talking about doing real homework and investing relatively small sums of money to a bunch of upstarts. Hoping that it all turns out well and you’re able to triple your investment.
While, of course, being ready to lose it all…
But what else could you wait for when you’re promised a 20x growth within a couple of years? There ought to be somewhat higher risks involved.
Which casino to go to?
Of course, it’s somewhat a game like any other way of multiplying your money. Some people trade stocks. Many buy lottery tickets. Or roll the dice. While others invest into real estate or businesses.
There are endless ways for making money. It’s just laying around everywhere. Just go and pick it up!
But why would one choose investing into businesses? Who knows… It might be too much of an effort to keep looking at the screens. Or not efficient enough to hope that one day you’ll see three of the same kind. While investing into real estate’s not fast enough.
Though, why startups, not real businesses? The ego! Being there before others could see the potential. And making so much bigger returns if you truly find the next unicorn.
Let’s be honest. There’s no rational reason to invest into such unstable companies. As even most venture capital funds don’t earn much money doing it. But they still keep on doing it.
Now, your options are limited, when you don’t have millions at hands and still want to play the game. There’s starting a fund and becoming an angel investor. But neither is a real option. Unless you want to change the career or still have a lot of money already.
So, how then? Crowdfunding is the answer. Not the charity or park-based ones that are not investing, but buying or giving away. I mean crowdfunding, where you get equity or any other agreement saying you now own part of the company.
Why such a radical thing? Because you can usually start with as little as a couple of hundred euros. And there’s no need to do any work. Other than choosing where to put the money and saying farewell to it. But you’re able to win big as all other startup investors. If it works out!
How to pick a table?
There’s so many of those damn platforms. Which one to trust? Or where to find the companies that are less risky to invest in?
It’s less of a question whether to trust the platform will help you get a payout one day. But more, whether they’re doing some work for you or not?
Are they letting anyone to set up a syndicate? Or is there somewhat longer vetting process behind there? Perhaps with professional investors choosing if they’d invest into the upstarts themselves. Or at least doing the due diligence of going through the finances and other documents for you.
It’s always the simplest to ask ’em about it. Or go through their documentation. But usually it’s also a good indicator if they’ve got less syndicates opening up every day. And the success ratio is rather high.
E.g. Funderbeam, the platform we chose to raise on, has tens and tens of companies pending. But only a few have got a chance to open their syndicates. And even better, they’ve got a marketplace to start trading the shares right away. Or tokens as they call it for legal reasons to make it possible to do so.
Where to sit?
After deciding to test your luck in crowdfunding. And, picking the platform to do the dirty work. What next?
Now’s the question of choosing whom to trust your money to. Also known as, taking time to get some work done…
- Check out the team. Perhaps you know ’em and already trust they’re not complete laggards. Or at least hopefully they’ve got some beneficial experience in the field at.
- Understand the magnitude of the problem they’re looking to solve. Does it exist? Is this the solution to fix it? How big’s the potential market?
- See if there’s a problem-team fit. Whether the people are really capable of solving the problem. The problem might be there and you might like the guys, but sometimes it’s too much of a longshot.
- Play with the vision. Is it really going to change the way we experience the world? How long will it take to happen? Are you willing to wait? Or can you opt out at any given moment (e.g. on Funderbeam platform it’s possible to sell your part whenever you feel like it — like on any stock market)
- Maybe look at the finances. If you’re mostly convinced but not sure if the numbers are there, then ask to go through ’em. Unless there’s something to hide, you should be given access to them. At least under some special circumstances, like visiting the team’s office.
- Decide and wire the money!
- Wait and hope all goes well. Or forget and be surprised if it does…
My experience in crowdfunding…
I’m now running my third crowdfunding campaign.
First to fund my trip to Draper University. That one didn’t go really well, as I wasn’t really able to offer much to the investors. Just a tweet or a note saying thank you.
Second to raise our seed round for Shipitwise. This became the most successful crowdfunding campaign in Estonia up to date, raising €167’200.
Third to raise our bridge round for Shipitwise in order to get ready for our Series A. 50% of our minimum target was filled within the first seven hours. And it seems the minimum target of €100’000 will be reached by the end of this week, the latest. So we’ve got at least two weeks to reach €250’000. This seems more than doable!
Why did we choose to raise our investments through Funderbeam? Because they chose us to do it the first time, and it was successful enough to try it again. Also, we see that our friends and family are able to cash out at any given moment thanks to the marketplace. And this gives all potential investors a bit more trust in the platform. Especially now that it’s really started to work…
And why should someone invest in Shipitwise? Because we’ve got the fastest adapting team full of all kinds of professionals. Constantly attracting more and more great names to join us. And as the logistics market really is broken for more than a couple of reasons. Can we solve it? So far the numbers seem good and the feedback from customers is just excellent. Thus, hope so! At least we’ve all invested our time and money into it. And will keep on doing it as long as it takes to build a true logistics AI…