Equity or investment crowdfunding has received a good bit of traction over the past few years as federal and state regulations have been put in place to open up the opportunity for business owners to raise capital from a larger pool of potential investors.
While the well-meaning regulations established after the market crash of 1929 were put in place to protect investors, they effectively eliminated everyone that wasn’t considered “rich” from investing in early-stage companies. This new era of investment crowdfunding has shifted the industry back toward “everyday” investors being able to participate but as with all investments, there is risk in the potential reward.
Elvis Picardo, contributor to Investopedia, does a great job covering the up and downside of investment crowdfunding in his article, Invest through Equity Crowdfunding: Risks and Rewards (June 25, 2019).
Please take a look and let us know your thoughts below on what you feel like are the greatest benefits and risks that potential crowdfunding investors might face.