Benefits for Investors

In a world where the returns from traditional investments are as exciting as a sock party, investment crowdfunding opens up a fresh and appealing range of possibilities. But why should the average investor be interested in this modality? Let's look at some of the main benefits.

Portfolio Diversification

Investing in crowdfunding allows access to projects you won't find on traditional exchanges. From tech startups in Silicon Valley to alpaca farms in Peru, the possibilities are as diverse as your appetite for risk.

Access to Exclusive Opportunities

Participating in crowdfunding can give you the chance to invest in companies that have not yet gone public. Imagine having invested in Facebook before Zuckerberg ditched the idea of face books.

Community Participation

Joining crowdfunding groups with similar interests allows you to be part of an investor community. It's like having a book club, but the novels hopefully generate money.

Potentially High Returns

The high risk comes with high returns, a theory that is not always true, but in the case of crowdfunding, success stories are as close as Steve Jobs' garage.

Reduction of Intermediation Costs

Eliminating traditional intermediaries reduces costs and allows fees to go to your pocket rather than to some broker who buys a new tie every day.

In summary, investment crowdfunding allows both small and large investors to diversify and access a range of financial opportunities that for years were reserved for a select group of individuals with exclusive access. Now, we can all play on the same board. Or almost.

Success Stories

The beauty of investment crowdfunding lies not only in its promises but also in its success stories. Let's take a look at some of the most emblematic cases that have defined the current landscape.

Pebble, the Smartwatch

Before smartwatches became indispensable companions for health enthusiasts, Pebble was one of the pioneers in the tech space fully funded through crowdfunding. This startup raised over $10 million in its campaign, thus starting a revolution in wearable devices.

Oculus Rift and Virtual Reality

Imagine having participated in a platform that redefined digital entertainment. Oculus Rift, the startup that Zuckerberg eventually acquired for $2 billion, began its journey by funding itself thanks to thousands of small investors on a crowdfunding platform. We're talking about a surreal application.

Mazes & Monsters

Yes, before Dungeons & Dragons gained its great fame in the geek world, Mazes & Monsters was a community-supported game, demonstrating that creativity and community funding can foster genuine cultural expression.

The Rise of BrewDog

BrewDog, the Scottish brewery, forever changed the way beverages could grow commercially. Its crowdfunding success not only raised millions but also paved the way for other brands to use the power of the thirsty crowd to grow.

Risks Involved

Not everything in this sea of opportunities is gold, and in investment crowdfunding, the risks are as present as the tempting offer of apples in a market. Here, we show you the main dangers you should consider before reaching for your wallet.

Lack of Liquidity

Unlike stocks that you can quickly sell when you need cash for a night out (or to pay bills), these types of investments are not as liquid. You could end up stuck in an investment like a fish in the mud.

Uncertainty About Returns

Investing in unproven projects means accepting that you might not see a penny back. It's like betting on the scrawniest horse to win the race... fingers crossed.

Regulatory Risks

Laws and regulations vary significantly from place to place. Essentially, navigating the waters of crowdfunding can involve crashing into legality in certain jurisdictions that are still in the financial Jurassic period.

Lack of Control

You can't control how entrepreneurs will use your investment. It's better to have a good radar for spotting serious project creators, because otherwise, you might end up funding a ninth sequel of a mediocre series.

If Warren Buffett taught us anything, it's that "risk comes from not knowing what you're doing." If you understand what investment crowdfunding entails, maybe the risks won't make you sweat like a politician under trial.