Startup Investing

Equity crowdfunding is quickly finding its legs. For 2014, we estimated upwards of $700 million of capital invested in startups would be through equity crowdfunding platforms. Investors who have already migrated to these platforms are the early adopters, quick and flexible and open to trying an innovative new way to invest in the next Google, Facebook and Apple. However, many investors are still reticent to getting their feet wet since it’s still not entirely clear how equity crowdfunding works. This article dispels four myths about equity crowdfunding to offer investors a new investment track in some of the most exciting opportunities in the startup scene. Myth #1: Companies that choose crowdfunding couldn’t raise venture capital Raising money via crowdfunding channels may look easy, but in reality, it isn’t. And companies that are considering fielding an investment on an equity crowdfunding platform are, more times than not, choosing between many different sources of funding. Many of these companies have already raised an investment from an early stage venture capital firm or from other angel investors. Many will ultimately go on...