Are you a North Carolina resident? If so, did you know you can now be an investor in North Carolina businesses too?
The NC PACES Act allows for up to $2 million to be raised through crowdfunding with investments from accredited and non-accredited North Carolina based investors. With this new funding opportunity, many new investors are looking to get involved in the crowdfunding scene. It's much easier said than done though.
As a new investor, where do I start? Which industry will lead me to the most returns? How much do I invest at once? The list of questions can go on and on and quite frankly be overwhelming at times. Here is a short list that can help new investors get on track for investing within North Carolina.
Create a plan
Create a draft outlining your ideas, goals, and methods for reaching your goals. A tangible outline can help keep your mind clear and not stray off the right path. This plan can evolve and adapt over time. A typical plan will typically include, but is not limited to, what industries you are interested in, your budget for investing, and what companies you wish to invest in or companies that you think have potential but need research before finalizing a deal. This comes with experience and is totally OK. Do not get caught up on one idea and let it ruin the rest of your plans.
Know your interests
Being able to understand yourself is crucial for becoming a smart investor. Know your strong points and weaknesses. Professionals commonly like to invest in fields that they are comfortable in. A doctor who is looking to invest will more than likely invest in MedTech than retail for instance. Know your limits as well. It can be tempting to want to invest it all, but refer back to your plan and be smart. Diversify your portfolio amongst industries and people that you feel comfortable with. Use your connections within different industries and companies to gain leverage and useful insights as well.
Research the market
Possibly the most important thing any investor can do is perform research. Remember, you are giving away your money to these companies and individuals. Do extensive research about anything and everything that piques your investing interest. Companies want people to invest in them and they will do everything they can to appear perfect to appeal to potential investors. Research the marketplace, different companies, past investors who have succeeded, past investors who have failed, and anything else associated with the company you could potentially be giving your money to. There is no such thing as having too much knowledge, the more research and homework you do the better off you will be.
After creating a plan, conducting research, and finally choosing where to invest, go with your gut and pull the trigger. Self-doubt will lead nowhere but unnecessary worry and stress. After doing all the planning and researching you could possibly do, there is nothing more you can do but let the money do its job. Have confidence in yourself and your decisions. Understand that failure is acceptable too. The world’s most famous and profitable investor, Warren Buffett, has made investment mistakes costing hundreds of millions of dollars. This did not stop him though. He learned from his mistakes and continued to grow and improve his craft.
Be confident, be smart, and go invest in the North Carolina economy.