[crowdability-blog]

Only One Way to Profit From This "Mega Trend"

Today, once again, we’re breaking out our 2014 “crystal ball”!   We’re offering up a prediction about a major business trend, and dishing out advice about how to make money from it through equity crowdfunding. Let’s start with a quote:   “Take teenagers 20 years ago and ask them would they rather have a car or a computer?  And the answer would have been 100% of the time they'd rather have a car, because a car represents freedom, right?   But there is a new generation coming where freedom is defined by "I can do anything I want, whenever I want.  If I want a ride, I get a ride, but I don't have to worry.  I don't have to make car payments.  I don't have to worry about insurance. I have complete flexibility."  That is freedom too.   This quote, from November 2013, comes from Marc Andreessen, one of the planet’s most far-sighted and successful entrepreneurs and investors…   Marc made a king’s ransom investing early in homeruns like Facebook and Twitter. So when he makes statements about the future, we put down the remote and perk up our ears.  In this case, he’s pointing to a new trend that enables “freedom.” This trend has such massive implications that the term mega trend is more appropriate.   Freedom (and Cashflow!)   The mega tend I’m talking about is known as “The Sharing Economy.”   The Sharing Economy allows us to use the internet to rent anything we need from other people just like us. Cars, bikes, boats… even parking spots and power drills. Instead of buying them, now we can “rent” them from our neighbors.   Sharing is turning into a big business, and we believe it’s going to get bigger fast. We’re not alone: Forbes estimates that sharing put $3.5 billion into citizens’ wallets this year, and is growing by 25% per year.  Let’s look at an example…   Something In The Air   At a holiday party in NYC last month, I was talking to a fancy friend – a 37-year-old investment banker – about her upcoming vacation to Paris. I asked her where she was planning to stay, expecting her to mention some swanky hotel.   Instead she said this: “An awesome apartment overlooking the Seine! I’m using Airbnb.”   “What’s Airbnb?” you might ask. Simply put, it’s a fast-growing hospitality service. The “bnb” stands for “Bed & Breakfast.”   For those willing to “share” their home in exchange for some income, Airbnb allows you to rent out your spare bedroom (or your whole place, without you in it) by the day, week or month.   And for travelers, it makes for a more affordable and interesting stay.   Airbnb has 300,000 listing in 192 countries. In 2012, acting as a matchmaker and administrator, they helped 2.5 million people find a place to stay. In exchange for handling the reservation, collecting the money, and providing insurance, they take a cut of the transaction – about 10%.   Now let’s look at another example of the Sharing Economy…   Lyft me Higher… Or Just Across Town   Lyft is a service that allows people with spare time and a car to run a taxi company.   Need a ride somewhere? Fire up the Lyft “app” on your phone, electronically “hail” a cab, and a regular citizen with a regular car will soon be chauffeuring you to your destination. All fees are pre-negotiated.   Get in Early   It certainly seems that there’s gold in these sharing hills. But here’s the important thing about investing in – and profiting from – mega trends:   Young companies like Lyft and Airbnb are privately held. You can’t buy their shares on the stock market. And if they do go public in the future, by that time the big profits will already have been made.   You need to invest while they’re still small. You need to get in early.   Lyft, for example, raised its first round of $300,000 in 2009. Its valuation (the private company equivalent of a “market cap”) was likely in the $3 million range.   Lyft went on to raise $60 million in May 2013 – at a $275 million valuation. That’s the equivalent of a 9,100% gain in 4 years!   Airbnb has done even better. Its valuation in 2008 was about $1 million. This year it was valued at $2.5 billion. That’s a 250,000% return.   To read Airbnb’s back story (and to review those jaw-dropping numbers) click here »    How to Take Advantage of This Trend… Now   Airbnb shows you what can happen when you identify a mega trend and invest early.   That’s why we’re so excited about equity crowdfunding: now, regular investors can put money into high-growth companies at their earliest stages.   As believers in the investment potential of the Sharing Economy, we’ll pass along any relevant companies for your review in our weekly deal round-ups.   In fact, we recently featured one – a company called “Geekatoo." Despite the silly name, this “sharing” company is attacking a big, serious market:   Geekatoo allows independent IT technicians (i.e., anyone with specific IT skills and free time) to “share” their technical services with those who need help.  Their main competitor, Geek Squad, does $2 billion in annual sales. Geekatoo is creating a less expensive and “shared economy” version.   While Crowdability doesn’t make specific investment recommendations, it certainly appears that Geekatoo is focusing on an attractive opportunity. To read more about it,click here. Here’s to a happy, healthy, profitable 2014!

[crowdability-blog]

A "Goldmine" for Biotech?

Get ready for action… Over the next several weeks, we’re going to break out our “crystal ball”!   Wondering who’s going to win the Super Bowl, or the men’s downhill in the Winter Olympics?    Umm, if so, you might be reading the wrong email... But if you’re looking for predictions about major business trends – and for advice about how to make money from them through equity crowdfunding – you’ve come to the right place. Ready for our first prediction?  Here we go. Get Vertical There are two main approaches to building a business. The first is to sell a wide range of products or services to a wide range of people. Amazon is a great example of this: they sell everything to everyone.  That’s called a “horizontal” approach. But when I send my girlfriend flowers, I don’t go to Amazon. I go somewhere that specializes in flowers – for example, 1800flowers. Companies like this take a “vertical” approach.  Since they focus on one single thing, they become experts in that area. And they can use that expertise to source (and to deliver to their customers) the most relevant, high-quality products.  These two different approaches – horizontal versus vertical – can also be seen with “equity crowdfunding platforms,” the websites that match start-ups with investors. Let’s look at examples of each, and then predict which direction the wind is blowing in 2014… From Angels to Moguls AngelList was one of the first equity crowdfunding platforms, and today they’re still one of the best.  They currently host 30,000+ companies that are raising money. Given the large quantity of deals – and the fact that their companies range from enterprise software to lingerie brands – it’s fair to say that they’re a “horizontal” business. CircleUp, on the other hand, specializes strictly in consumer products like foods and beverages – from freeze-dried snacks and natural baby food to organic wines. That’s a definite vertical. RealtyMogul is in a different vertical. They specialize in real estate deals.  And RealCrowd, which we wrote about recently, specializes even further; they focus oncommercial real estate deals. What specialization will come next? Read on… The Next Big Vertical We predict that the next big equity crowdfunding vertical to emerge in 2014 will revolve around the $2.5 trillion market for healthcare and “life sciences.” This is a natural sector for specialization. Healthcare is incredibly complicated and requires an encyclopedic understanding of (among other things): •    Medical research •    The FDA approval process •    Government healthcare policy Two platforms that focus on this sector have been on our radar for some time now.  Let’s take a look at each. Poliwogg Poliwogg has a penchant for healthcare – and that’s no surprise given their CEO’s background… Gregory Simon, Poliwogg’s founder and CEO, has experience as a senior executive at pharmaceutical company, Pfizer. He's also been a healthcare entrepreneur.  Beyond that, he has extensive experience overseeing healthcare initiatives as a member of Congress and the White House. In fact, Simon was involved with programs spanning the National Institutes of Health, the National Cancer Institute, and the FDA.  In brief, Greg has a broad wealth of knowledge covering everything from healthcare and healthcare policy, to drug research and drug development.  With a CEO like Simon, Poliwogg’s deal flow in the healthcare sector is likely to be strong – and he’s likely to have a good sense for what might be successful.  This benefits you. If Poliwogg brings in strong deals, that means less research and less worries for you – and potentially, it means better profit opportunities. Something Ventured… Another platform focusing on life sciences is VentureHealth. The platform’s founder, Mir Imran, has been in medical technology and healthcare since the late 1970s. In fact, Imran is one of the world’s leading healthcare inventors and entrepreneurs. He holds more than 200 patents, and has founded more than 20 medical device companies.  Even more impressive: 15 of his companies have gone public or been acquired.  He’s also founded a research lab and a life sciences venture fund, sits on the board of many “med tech” companies, and is Chairman of a product development company that focuses specifically on medical devices. Just like with Poliwogg, the founder's specialized background adds up to better deals for you. And More Predictions Poliwogg and VentureHealth's management teams have strong sector knowledge and deep connections to government and industry. This gives them an advantage in identifying and vetting healthcare start-ups, and in understanding the market potential of a new drug or medical device. Equally as important, their vertical focus means that – when the time is right – they’ll know where to go to secure a key partnership or additional funding on behalf of the start-up, or how to create a merger or sale. These types of advantages are significant – which is why we’re predicting that other platforms will jump on the verticalization trend, too. Reflecting These Predictions At Crowdability Given our excitement about Poliwogg and VentureHealth, we’ll soon be incorporating some of their investment opportunities into Crowdability. We hope there will be some exciting money-makers in there for you! Until then, visit both Poliwogg and VentureHealth directly » Here’s to a happy, healthy, profitable 2014!

[crowdability-blog]

2014 Equity Crowdfunding Toolkit

“Wow, what a year!” said my Crowdability co-founder, Matt Milner. We were sitting on an Amtrak train headed back to New York City.  We were both sipping a scotch and winding down after a whirlwind business trip. Matt was right – it has been a heck of a year – and we’ve made more progress than we could’ve ever hoped for. And even though we’ve only been in business for a few months – much less than a year – I’ve always thought it was important to take a little time off at the end of a long year to reflect on things.  To take stock of what we’ve accomplished, what we’ve learned, and even more importantly, how we’ll improve in the coming year. And we think you’d be well served to do the same.  Let me explain... Take a Page From Our Playbook To be totally honest, Crowdability initially started out as a fun “side project” for Matt and I. But the response we received was so overwhelming that we decided to dedicate all of our time to it. Part of that decision was due to the amazing feedback and encouragement we’ve received from you and thousands of other Crowdability readers.  But it’s also due to the rapid progress the SEC has made on the JOBS Act. In fact, we think things are going to start moving even faster in 2014. And to help you prepare for that, we thought now might be a good time for you to take a page from our playbook:  Spend the next few days reviewing and reflecting on some of the most important and popular essays we’ve published in 2013. We highly recommend printing them out and regularly going back to them as you continue to wade into the equity crowdfunding waters. Get Ready for 2014 1.  Equity Crowdfunding 101 – You received this report as part of your Crowdability “welcome package.”  If you haven’t read it yet, then read it now – and if you have read it, then read it again.  It explains why equity crowdfunding could be one of the most important financial reforms in history and why we think it’s one of the greatest profit opportunities of our lives.  You can download the report here » 2.   3 Golden Rules from Peter Lynch – You normally wouldn’t associate a die-hard value investor like Peter Lynch with something as speculative as investing in startups.  However, we believe that many of Lynch’s “conservative” investing principles can be applied to this “risky” asset class.  Check out Lynch’s 3 Golden Rules and how they can help you with your crowdfunding investments here » 3.  How to Make Money in Equity Crowdfunding, Guaranteed – In this essay Matt explains the primary way you’ll earn enormous returns in this asset class…without ever touching the stock market.  A quick and worthy read » 4.  The 3 Most Common Crowdfunding Concerns – After collecting emails from subscribers for 3 months, we’ve identified and responded to the most concerns new early-stage investors have about this emerging asset class.  This is a “must read” if you have cold feet about crowdfunding » 5.  The Proven System for Early-Stage Investing Success – In addition to the “3 concerns” we mentioned above, the biggest misconception many novice early-stage investors have is that startup investing is too “risky.” Make no mistake, it can certainly be high-risk, but it’s also high-reward.  And there are people – “venture capitalists” to be exact – who have been investing in this asset class for decades and continue to trounce the stock market. It’s why they’re some of the wealthiest people in the world.  And in this essay, we show you a study that reveals the secrets behind the most successful early-stage investors, and how you can use them too » Happy New Year We hope you enjoyed catching up on some of our favorite essays from 2013.  We certainly enjoyed writing them. You won’t receive another essay from us until next year, so until then we want to wish you and your family a very happy and healthy new year. All the best in 2014!

[crowdability-blog]

How a Startup Could Change Your Life

I want to share a very personal story with you today.   It’s not one that I tell often – partly out of embarrassment, and partly because it’s kind of painful to think about…   Let me begin by saying how truly blessed I feel each and every day.    In addition to being healthy and having a great relationship with my family and friends, I’ve managed to accumulate a sizable amount of wealth for someone my age. I live in a luxury building in midtown Manhattan, and I spent the last year traveling the world after selling my last business.   There was a time, however, when I couldn’t imagine living this sort of lifestyle.   You see, I was born in Queens, New York and like most of my childhood friends, all I really hoped for in the future was a stable job with a steady paycheck.   “The rich get richer” wasn’t just a cliché in my old neighborhood – it was a fact!   Or at least I thought it was… until I learned about the world of technology startups and the Internet. Let me explain…   “We’re Losing Our Home”   I remember the day vividly.   A massive man with biceps the size of my head came to the door of my house. I was 14-years-old and had taken the day off from school.   When I opened the door – just a crack because this guy was pretty intimidating – he asked if I lived there.   “Yes,” I answered. “How can I help you?”   “Give this to your parents,” he said. Then he walked away.   I opened the thick envelope and realized immediately what the letter was for – and why a guy that large was chosen to deliver it.   As I came to learn, when someone receives a notice that their home is being foreclosed on, chances are they’re not going to take the news very well.  And it’s probably better to have an intimidating guy deliver the letter so that the homeowner doesn’t do anything rash.   When I finally gathered the courage that evening to show the letter to my mom, she broke down and cried.    A Little Bit of Luck   I remember how guilty I felt as we were packing up to move into a rental apartment.   You see, several months before that letter arrived, I’d been begging my parents for a computer – and they’d finally agreed to buy one for me.  It was an old refurbished machine and only cost a few hundred dollars, but it was still a major expense for them at the time.   I almost went out and sold it so I could give my parents some of their money back.  But then a very fortunate thing happened…   My father had a childhood friend from California.  His name was Victor and he’d visit us from time to time. Victor had held various roles at technology companies since the 1980’s, and was well connected in “The Valley.”  (That’s short for “Silicon Valley,” where they used to make silicon chips, and where they now make Internet fortunes.)   He was visiting right around the time we were moving and he offered to take me out to lunch. I think he could tell I was feeling a bit down. When I told him about my guilt, and my plans to sell my computer, he looked at me like I was insane.   “Wayne,” he said, “do you realize how much money you could earn if you learned a bit more about computers?”   I was confused. How could I earn money when all I did on my computer was play video games?   That’s when Victor explained the world of tech startups to me.  And Silicon Valley.  And software development.    He opened my eyes to people and companies that were changing the world.    A Lot of Hard Work   Even better than that, Victor set me on a path that would profoundly better my life, and the life of my family. He suggested that my best bet for earning income was learning how to build computer programs and websites. It’s called “writing code.”   So I set myself to the task of learning how to “write code.” I figured if I could make a few hundred extra dollars per month then I could help out with the bills around the house… and I’d feel less guilty about my parents buying that computer.   Victor got me a paying job, and little-by-little, more business kept falling into my lap.   I finally got a “break” when a small startup from Texas hired me to work remotely. It was steady, part-time work.   Within 6 months, I was earning more than both of my parents.    My Calling   But ultimately, my calling wasn’t to be a programmer.    I learned a lot from my boss in Texas. I learned how he built his business. I saw the freedom it afforded him and his family, and I saw the wealth he was able to generate. And that’s when I decided I wanted to be an entrepreneur.   I wanted to chart my own course, and I wanted to provide a better life for myself and my family.   It sure wasn’t smooth sailing (I’ll save that story for another essay), but ultimately two of my businesses were acquired, and I was able to use the proceeds to live the type of lifestyle I’d always wanted.    I was able to give back to my family too… I can’t begin to explain how gratifying it was to hand my mom a check so she could buy a new car.   My point in telling this story isn’t to brag… or to make you feel sorry for me.   The reason I wanted to share this is to emphasize a major lesson I learned.   You see, I didn’t make my money by earning a salary. I didn’t scrimp and save in order to be where I am today.    I generated true wealth by owning equity in “startups” – early-stage high-growth businesses.   With technology startups, you can begin with an extremely small stake (or in my case, nothing at all) and literally change your fortunes.   This is why I’m an entrepreneur to this very day, and it’s why I try to help other entrepreneurs and investors become successful.  It’s why Matt and I are so passionate about the JOBS Act and equity crowdfunding.   Now everyone – regardless of whether they were born rich or poor – has the opportunity to participate in the industry that literally changed my life.   I know today’s post was a little unusual.  Thanks for letting me share – and happy investing!

[crowdability-blog]

How to Lose $119 Billion in A Day

Can you imagine losing $119 billion in a single day?

That might sound like an impossible amount of money to lose in any amount of time, but in the high-stakes world of startups, it really can happen in a day. And whenever there’s a “loser” in a zero-sum situation like this, there’s also a “winner.” The difference between the two? Vision. Today, we’ll show you how a well-known company (you might even own the stock) lost $119 billion in a single day due to their lack of vision. And we’ll tell you about the winner on the other side of the table; the recipient of a cool $119 billion. That Fateful Day The year was 2006. A relatively small company – they had a little over 100 employees at the time, and skimpy revenues – was presented with  an offer to be acquired.  The price tag? $1 billion. The potential buyer? One of the largest Internet companies in the world. Initially, the press made it sound like the smaller company declined the offer. But recently, the truth came to light. In fact, they accepted the offer, and were ready to move ahead with the merger. One ill-fated day, however, at the very last minute, the potential acquirer got cold feet. They decided to lower their offer by $200 million. The smaller company walked away. If you haven’t guessed it already, the big company was Yahoo! (YHOO) and the small company was Facebook (FB). The Short-Term Perception Trap Yahoo! was ready to buy Facebook for a billion dollars. To some, $1 billion for a company doing $30 million in sales and losing gobs of money seemed downright insane. But Yahoo! – initially anyway – stood behind its offer. Then, one day in 2006, Yahoo’s stock price took a hit. Their board got scared about making $1 billion bets. They revised their offer for Facebook. They tried to value it in terms of what it was worth at that exact moment, not what it could become in the future. This is a classic early-stage investing mistake: the short-term perception trap. They decided to lower their offer to $800 million. Meanwhile, unlike Yahoo!, Facebook’s perception of the future wasn’t clouded by short-term fluctuations in stock price. They believed the world needed a new way to connect and share information. They believed in the power of social networking.  And more than anything, they believed they could be the #1 social network in the world... Although the $1 billion offer proved too tempting for Facebook to decline, the revised offer for $800 million seemed to splash water on their face and wake them up. It reminded them that if they became the #1 social network in the world, they’d be worth a whole lot more than $800 million or $1 billion. And if Yahoo! hadn’t fallen into the perception trap – thinking in terms of days, weeks and quarters instead of decades –they might have acquired Facebook, currently a $120 billion asset, for a measly billion dollars. A “loss” of $119 billion. That has to hurt. Have a Vision If there’s a lesson here, it’s this: when you invest in startups, come to the table with a new framework. It’s not like investing in the stock market. There’s no ticker to tell you when a company is undervalued or overvalued. There aren’t cashflow models you can use to determine fair value for the business. When you invest in a startup, you’re not investing in what the company is today – you’re investing in what it could become in the future. If Facebook had sold to Yahoo! for $1 billion (or even $800 million) they would’ve generated a fantastic return for their initial investors. But by playing a “long hand” and executing on their vision, Facebook unlocked over $119 billion in additional value for its shareholders. So before you invest, always ask yourself:

What’s the company’s vision? Do I share it?

If this vision comes to fruition, what will its business look like?

Do I believe the company has the right team to execute on this vision?

If you can answer these questions about vision – and feel good about the answers – you’ll be a good “long hand” startup investor!

[crowdability-blog]

Learn and Profit From the World's Best Startup Investors

Every year, Forbes Magazine publishes the “Midas List” – a list of the top U.S. venture capital firms. The folks on this list are professional investors with a track record of success – so if you’re interested in early-stage investing and want to emulate the best of the best, you should pay attention to their names, right? Uh, wrong. Today, not only will we show you who should really be on the early-stage Midas List – we’ll also show you how to “follow” them so you can invest alongside them. And since our topic today is about how to leverage the best startup investors (and, yes, since it’s holiday time), we’re also going to share with you a special report we just published. In this report, four professional early-stage investors reveal how they’d approach equity crowdfunding if they were in your shoes. The Midas Touch? Venture capitalist Fred Wilson (Managing Partner in Union Square Ventures and early investor in such companies as Tumblr and Twitter), believes the Midas list is mistakenly capturing all kinds of investors – whether they’re “Seed” and “Series A” investors who write checks when a company is little more than an idea on the back of a napkin, or “Later Stage” investors who invest when a company is more mature. As Fred wrote, “For me, the firms who invested in the Seed and Series A rounds of $1 billion+ exits is the only list I care about.” You see, most of the firms on the Forbes List are “later stage” investors. Instead of investing small amounts of capital into unproven startups, they put a ton of capital into later-stage companies. By the time a later-stage venture capital firm like Kleiner Perkins invests, a “startup” might already have hundreds of employees, and millions in revenue. They might even be on their way to going public. What Fred is saying is that by the time the “Midas” investors put money into a company, it’s no longer a question of if the businesses will succeed, but rather a question of whenthe success will happen, and how big it’ll be. And if that’s the case, what could early-stage investors like us – investors focused on opportunities in the equity crowdfunding market – possibly learn from the folks on the Midas list? The answer is this: Not much. The Real Midas List But what if we could put together our own Midas List? A list of investors who actually have the “golden touch” like old King Midas? Let’s give it a shot... Based on Fred’s criteria, let’s look for professional investors who have invested in multiple startups at their earliest stages – startups that have eventually been acquired or gone public (often called an “exit”) for over $1 billion. According to a recent article on TechCrunch, since 2003, 39 venture-backed startups have been valued at over $1 billion. Some of the companies have yet to “exit,” so we’ll focus only on the ones that have already been acquired or gone public. Using CrunchBase (an amazing tool for any early-stage investor), we can look for investors who were involved in these companies’ Seed or Series A rounds of financing. Below is our “Midas List” – I’ve included the name of the firm or individual, and the number of “billion-dollar exits” they’ve been involved in. (Finding the names of individuals can be challenging; finding the name of firms is a piece of cake.) 1.    Sequoia Capital ¬– 5 2.    Greylock Partners – 4 3.    New Enterprise Associates – 4 4.    Peter Thiel (including Founders Fund investments) – 4 5.    First Round – 2 6.    Charles River – 2 7.    Union Square Ventures – 2 8.    SV Angel – 2 9.    Austin Ventures – 2 How This Helps You Now, you may be thinking, “Thanks for the great list, Wayne – but how does this help me make money?” Well, if you read the article I wrote in October:  3 Super Investors to Follow for Crowdfunding Profits, you’ll recall that I showed you a way to invest alongside top angel investors by “following” their activity on AngelList, a high-quality crowdfunding platform. Now you can do the same with our “Midas List” above. You see, even though many of the names are firms as opposed to individual investors, we can still find and follow people that work at those firms. For example, if you look upGreylock partners on AngelList, you’ll see that, 2 months ago, one of the partners, Josh Elman, started to follow a company on AngelList called memoir. At the time, memoir was raising a seed round. In addition to Josh, there were a number of other successful angel investors following and investing in the company. As we’ve said in our essays – and in our 10 Crowd Commandments white paper – it pays to be a follower when it comes to equity crowdfunding. You just need to be sure you’re following the right people! Speaking of following the right people, we have a free gift for you today that’ll introduce you to some of the “rightest” people in the early-stage universe... Our Gift To You As you know, my business partner Matt and I are very excited about equity crowdfunding and its potential for individual investors. So we’ve been talking to everyone we can about this new market – not just about ways we can help our readers navigate this new world, but ideally, how we can help them make money. And some of our venture capitalist friends offered to help us out. Recently, we sat down with four of these friends for several hours to discuss how they’d approach equity crowdfunding if they were in your shoes – for example, what types of opportunities would they look for, and what would their investment process be? Based on these interviews, Matt and I created a new white paper to share with you today. Essentially, it’s an insider’s look at how professional venture capitalists would invest in equity crowdfunding. We’re calling it, “Tips from the Pros” and you can download it for free today » We hope you enjoy it, and please send us your comments, questions and feedback. We’d love to hear from you.  ([email protected]) Again, the report is free (for now) and can be downloaded here »

[crowdability-blog]

Be The First to Find "The Next Big Thing"

Imagine yourself sitting in a high-backed leather chair in an oak-paneled office. The year is 1905, and the first Ford Model-T’s have started to dot the road. You live in Detroit, Michigan – ground zero for the automotive industry – and work at a small investment fund. Entrepreneurs visit you throughout the day, asking you to invest in their projects. One afternoon, two men come in, one right after the other – Adam and Jack. Both are successful businessmen, and each is passionate about a new business idea. You listen carefully to each of their presentations, and then spend a few hours doing some thinking. By the end of the day, you call Adam and let him know you’ve decided not to invest in his company. “But why?” asks Adam. “How could you decide so soon?” “Well,” you say, “it’s simple. You’re starting a company that makes better shoes for horses. That’s the past. Another gentleman was here today and he’s building a better engine for cars. Horseless carriages – that’s our future!” Jack was catching a wave – or as we like to say, he was capitalizing on a megatrend. As investors, not only should we follow megatrends; we should try to catch them before others. This is especially true when it comes to early-stage investing. Today I’m going to tell you about a megatrend that has us very excited – a trend I believe will play out in both the private and public markets over the next several years, and will allow early investors to profit handsomely. Urban Problems Since the 1920s, more and more Americans have left rural areas and flocked to urban areas like New York, Los Angeles and Chicago. In fact, according to the U.S. Census, the population of urban areas in this country grew by more than 12.7% from 2000 to 2010 alone – outpacing population growth by 33%. This is a megatrend! Everything becomes more difficult to manage as urban centers grow – from basics like water and sanitation, to complex issues such as housing and transportation. As our national debt continues to mount, we can’t rely on the public sector to solve these thorny problems. Solutions need to come from the private sector – and thankfully, entrepreneurs have the passion, and the financial incentive, to try and create these solutions. Let’s take transportation as an example... Urban Solutions Living in New York City spoils me. If I need a ride home after midnight, there are usually a dozen yellow taxis vying for my business. A couple of years ago, however, on a particularly cold and rainy night, there wasn’t a cab in sight. So on the recommendation of a business associate, I pulled out my mobile phone and fired up an app called “Uber.” Uber is a mobile application that quickly connects passengers to drivers. With the touch of a button, a car picks you up and takes you to your destination. The cars are well-kept town cars or SUVs, and your credit card is on file so you don’t have to worry about payment. The coolest part is that you can track the car from your mobile phone’s GPS, so you know exactly when it will arrive – that means you can wait inside a warm, dry restaurant while it’s pouring outside. Uber is already in many U.S. cities, and is starting to expand internationally. Thecompany’s revenue numbers were leaked the other day and it looks like they’re generating over $1 billion in annual sales – and this is just a few years after the company got started. This stunning revenue growth might explain why Google invested $250 million into the company at a whopping $3.5 billion valuation. (“Valuation” is the private company equivalent of a “market cap.”) Uber is a perfect example of a company taking advantage of a megatrend. Where to Find The Next Uber But Uber isn’t the only company capitalizing on the urban growth megatrend by attacking the transportation market. There’s a similar company called Leap Transit – and Leap is currently raising money on AngelList, one of the high-quality platforms we cover on Crowdability. Simply put, Leap aims to become the “Uber for Mass Transit” by creating a new type of bus service. They’ve already launched in San Francisco, and now they’re looking to expand. The buses are spacious, comfortable, and equipped with internet access. And similar to Uber, you can track your bus on a mobile phone so you don’t have to wait outside in the cold. We might also mention that we’re attracted to Leap’s simple business model. At $6 per ride, it’s easy to calculate how many commutes it would take to reach a billion dollars in revenue! Another transportation company raising funds on Angel List is Corral Labs. Corral is differentiating by focusing on shuttle buses – the type of multi-passenger service you might take to the airport. We also see plenty of opportunities outside of transportation... We believe urban dwellers will need to rethink everything from how they generate energy to how they find a place to live. And as entrepreneurs create solutions to these problems, investors like us will be presented with significant investment opportunities. As the urban growth megatrend continues to play out, we’ll continue to bring these new opportunities to your attention. If we can get in early on the next Uber, the returns could be tremendous!

[crowdability-blog]

3 Ways to Earn "Private Income" Every Month

When we hear about “startup investing,” we generally think of the big paydays that occur when an early-stage company is acquired or goes public – like Google, Facebook or Tumblr.

And historically, it’s true: profits from early-stage investing have come from “exits” like an IPO or a big acquisition. But thanks to technology innovation and the new laws around crowdfunding, now you can generate income through private investment opportunities. Today we’ll show you 3 ways to access these “private income” streams each and every month... 1. This One is For Real You’re probably familiar with real estate as an asset class – perhaps you even own some already. But the real estate investments available on crowdfunding portals are a bit different than your current options. Let me explain... Generally speaking, individual investors looking for real estate have a few options:

Buy actual real estate – This is difficult to do: it’s expensive to put down payments on multiple properties, and real estate is time consuming to manage. That said, historically, it’s been a good investment. Real estate has outpaced inflation, and because it’s not highly correlated to the stock market (i.e., when the market zigs, the housing market can zag), it can provide protection for your overall portfolio.

Publicly Traded REITs – Publicly-traded REITs (or Real Estate Investment Trusts) allow you to buy and sell shares of real estate portfolios through a stock exchange like the NYSE or NASDAQ. This allows you to own multiple properties with a small amount of capital. The biggest downside here is that publicly-traded REITs are highly correlated to the stock market – meaning, if the market drops, so might the value of your REIT.

Non-Traded REITs – This option offers the best of both worlds. You can own a portfolio of real estate properties without committing a large amount of capital,and the investment doesn’t trade with the market. However, the fees to get involved are far higher than tradable REITs.

In our opinion, equity crowdfunding presents a better option. On websites like RealtyMogul.com and RealCrowd.com (at the moment, you can actually invest in the RealCrowd platform itself – see Matt’s article from last month here) you can buy small shares of individual properties that aren’t traded on any stock exchange – and there are no high upfront fees to get involved. Target yields are generally between 5% to 10%, and there’s the potential for capital appreciation as well. This is a strong alternative to non-traded REITs and a great way to diversify your income investments in a cost-efficient way. 2. Energy One of the most interesting aspects to equity crowdfunding is that it can offer you exposure to new asset classes – the sorts of investments that are far less known to the majority of retail investors. For example, most folks are aware that they can invest in sectors like clean energy via publicly-traded stocks or ETFs. But did you know that you could earn income by loaning money directly to clean energy and solar projects? Basically, developers set up what’s called a “Special Project Entity” (or “SPE”) in order to build, for example, a new solar project. Their ultimate goal is to sell the power the project generates to the local utility. But first the SPE needs seed capital for construction and build-out purposes. Although these investments offer attractive returns (4% to 7% yields), historically they were generally difficult to find and fund as an individual investor. But on crowdfunding platforms like Mosaic, you can easily find and evaluate solar projects. Mosaic users have already funded millions of dollars worth of solar projects without a single default or late interest payment. Mosaic should be posting new opportunities soon... 3. Peer-to-Peer Loans One of the biggest crowdfunding markets to date is focused on personal loans – and these can pay substantial yields to lenders. There are many sites catering to this market, but the biggest is LendingClub. Since its founding in 2007, LendingClub has facilitated over $3 billion in loans on its platform, and is currently issuing $250 million in new loans per month. Borrowers come to the site when they want to pay down high-interest credit cards, or to make a sizable purchase like a new car. A typical loan might be $25,000 or $30,000 (LendingClub limits loans to $35,000). Then “the crowd” (many individuals like us) contributes small amounts – maybe $10, $20, $100 – towards the $30,000 loan. The borrower pays us back over time, plus interest.  Everything is managed by LendingClub. Gross yields before fees and defaults have typically ranged from 9% to 14% depending on the credit worthiness of the borrower. The 36-month average is 12.48% -- try finding that in your local bank! Although the average FICO score of a LendingClub borrower is high – currently it’s 703 – there is still the risk of late payments and defaults. Because of these risks, many professionals (including LendingClub) recommend creating a diversified loan portfolio of 200 to 300 loans. For those willing to invest larger amounts, LendingClub also provides a managed service, as well as a fund. You can learn more on their website » More to Come... As crowdfunding continues to mature, we believe more opportunities will emerge to earn attractive financial returns – from investing in high-growth startups for capital appreciation, to investing in real estate or loans to generate current income. We’ll keep you abreast of these opportunities, as we believe crowdfunding has the power to change the face of finance in this country. Let us know if you have questions about any of the opportunities and assets we discussed today. You can email us directly at [email protected].

[crowdability-blog]

Equity Crowdfunding's Billion Dollar Secret

It’s time for another pop quiz... Can you guess where this line is from? “A million dollars isn’t cool. You know what’s cool? A billion dollars."

Who guessed Justin Timberlake from the movie, “The Social Network”?

Ding ding ding! Yes, Justin recited that line as he played the part of Sean Parker, co-founder of Napster and the first President of Facebook.

But for today’s pop quiz, it turns out there’s more than one right answer. Why? Because those same exact lines can often be heard echoing in the boardrooms of real-world venture capitalists.

In fact, in the world of venture investing, the point of view captured by those words – go big or go home – is the general rule of thumb. And it’s not because Venture Capitalists (or “VCs”) are greedy. Sure, they want to do well financially – for their investors and for themselves. But that’s not what makes them go for a billion on every investment they make.

The fact is, to make real money in early-stage investing, they have to swing for the fences – and so do you.

How Venture Capitalists Earn a Profit

A VC – let’s call him Fred – earns a basic salary, about $100,000 per year. But Fred didn’t become a VC to earn $100k; he wants to earn millions. To do so, he has to generate serious profits for his fund.

This is no easy task. Historically, only 30% of venture investments return any profits at all. Let me explain...

Fred spends 5 years investing a total of, say, $100 million into 50 different companies. Even if Fred is a “successful” investor, one third of his investments will eventually go to zero, and he’ll basically break-even on another third. This means that all of his profits have to come from the final third. That final third has to include a couple of big winners – so big that they’ll make up for all the losers.

Keep in mind that Fred won’t earn a nickel more than his salary unless his investments return more than $100 million. If he’s successful and returns a nice profit, 80% of those profits are given to the fund’s investors. For his efforts, Fred is entitled to receive 20%.

Some Attractive Math

Let’s look at an example. 5 years go by and a couple of the startups that Fred invested in have successfully “exited” by being acquired by bigger companies, or by going public in an IPO. Fred turned his $100 million dollar fund into $300 million.

(Clearly, Fred will have a nice payday. He’ll earn 20% of the $200 million profit – or about $40 million. Yes, $40 million.)

To pull this off, Fred needed $300 million in returns. Considering that VCs only own a minority stake in the companies they fund (maybe 10% or 20%), in order to get to $300 million, his startups needed to be acquired for billions.

And here’s the “billion-dollar secret” we learned from VCs and are now passing along to you – the secret to make sure you build a successful early-stage portfolio:

You can’t get a billion-dollar exit without going after a billion-dollar opportunity. The fact is, you need to invest in companies that are attacking huge markets.

It might be fun to invest in a company aiming to be the “biggest candy store in Peoria, Illinois,” but it’s not likely going to be a financial winner in your portfolio. It’s not attacking a large enough market.

But how can you tell how big an opportunity is?

Homerun or a Base Hit?

The quickest way to get a sense of market size is to review the company’s fundraising materials. Look at their presentation, or their description on one of the funding portals. If they don’t articulate the scale of the opportunity – or if it’s simply not a big opportunity – it’s likely you should pass on the investment.

However, market size isn’t always an easy number to estimate – and could be difficult to verify. Reason being, many startups are focused on creating new markets.

For example, when Amazon.com first launched, there wasn’t an established market for “online book sales.” Their founder, Jeff Bezos, wasn’t able to tell investors that his company was going to take x% of an existing market.

However, he might have said something like, “We believe more and more people will make purchases online in the coming years, and books will be one of those purchases. Each year Americans buy over $20 billion worth of books. We believe we can capture 10% of that market online – making this a $2 billion near-term opportunity.”

That’s a believable narrative.

You should be looking for something similar.

One example can be found in a company I wrote about last week, Aromyx »

Aromyx is establishing a new multi-billion dollar market – and they’re doing it by displacing an existing market.

Fill your early-stage portfolio with potential billion-dollar opportunities. That’s the only way to ensure that your winners outpace your losers – and provide you with venture-sized returns!

[crowdability-blog]

How to "Double Down" on Equity Crowdfunding

“Double down!” my friend Walter screamed in my ear. “DOUBLE DOWN!” It was my 18th birthday, and my first time playing blackjack in a casino.

I grew up in New York City, where, among my group of friends, the right of passage when we turned 18 was to make a gambling pilgrimage to Atlantic City, New Jersey.

I found myself stuffed into an ill-fitting brown suit, seated at a low-stakes table. I had just drawn a 5 and a 6, giving me a total of 11. (For those who don’t play blackjack, the objective is to draw cards that, when added up, equal 21 – without going over 21).

Unbeknownst to me, when your first two cards total 11, you’re allowed to increase the size of your bet and draw a final card. It’s called “doubling down.” Since the highest card value is 10, there’s no chance of going over 21. And since your odds of winning have increased, it makes sense to increase your bet.

As it turns out, there’s a similar situation that occurs in the world of early-stage investing. Let me explain...

Invest Like A VC

Let’s say a venture capitalist, or “VC” for short, invests in a startup’s first round of financing. Sometime down the road, the startup is doing well. It decides to raise more capital in order to support its growth.

The VC now has two options:

1. Sit out this second round of funding

2. Participate in the second round (i.e. “double down”)

If the VC chooses Option 1 and sits it out, their ownership in the company will be decreased (a concept known as “dilution” which you can read more about in our 10 Crowd Commandments Report »).

If they choose Option 2, they’ll have to write another check – but they’ll maintain their ownership stake in what looks like a successful company. Essentially, they’re “doubling down” on the company and investing even more. This is their way of continuing to back what now looks like a less risky opportunity.

Unfortunately, smaller investors don’t generally have this opportunity. VCs usually insist on funding these “follow-on” rounds themselves.

But as we discovered this week, there’s one equity crowdfunding platform out there that’s making “doubling down” a reality for the average Joe.

In fact, we had a closed-door meeting with the CEO of this particular platform – and he let us in on what we think could mean big returns for small investors.

The “Double Down” Platform

The platform I’m referring to is OurCrowd » Their CEO, Jon Medved, came to visit us in our offices this week. Here we are. (FYI: I’m the one with the shiny head, and my co-founder, Matt Milner, is on the right.  Our guest, Jon, is in the middle).

When Jon presented his vision about the future of crowdfunding, he pointed to a company that had just completed a round of funding on OurCrowd: Parko.

Jon explained to us that this wasn’t Parko’s first time raising funds on OurCrowd; Parko had raised a first round several months earlier. This was their second round; their follow-on round.

We found this fascinating. OurCrowd is doing something we haven’t seen elsewhere: they’re getting involved and staying involved with their companies.

Not only do they put their own money into these startups – and not only do they take an active role in their development – but when one of their companies becomes successful and needs additional growth capital, OurCrowd brings it back to their funding platform to raise the necessary funds.

That means existing investors can continue to back what now looks like a less risky opportunity; they can take another bite of the apple.

How To Play It

Similar to blackjack, just because you can double down, doesn’t mean you have to.  Plenty of angel investors earn attractive returns without participating in follow-on rounds of financing.

But if you’re interested in using the follow-on funding strategy – and plenty of professional investors swear by it – OurCrowd is a good place to start.

In fact, there’s a company raising money there right now that we’ve recently written about: MST. This is MST’s first fundraising round on OurCrowd.

Who knows? If MST does well and later decides it needs growth capital, maybe you’ll have the chance to invest again – in a future round on OurCrowd!

If you’re interested, you can learn more about MST here »

[crowdability-blog]

How to Invest in a "Sure Thing"

Every once in a while you come across an opportunity that seems like a “sure thing.” An opportunity where it feels like you’re looking into a crystal ball – where you can see the future playing out before your eyes.

I felt that way back in the winter of 2005.

At the time, my “sure thing” was the yet-to-be-announced launch of the Apple iPhone. My crystal ball told me this was going to be Apple’s next big thing and would revolutionize the world of mobile phones.

The way to play this could’ve simply been to take a position in Apple. But generally, the upside potential of large cap stocks is limited; you typically won’t see big price movements – of, say, 50% or more – based on the launch of a new product.

So instead, I tried to find a small-cap stock that stood to explode if Apple launched an iPhone.

After months of research, I found the perfect opportunity.

I’ll tell you more about it in a moment, and about how it changed my fortunes.  But first I want to share with you my latest vision – my latest look into a crystal ball...

Smells Like... Money?

The vision I’m talking about relates to a privately-held business.  It’s called Aromyx.

Aromyx produces a technology that’s nothing short of revolutionary.

They’ve created a microchip that can detect, interpret and identify smells and tastes just like a human brain.  For example, let’s say a team of chemists is attempting to create a fancy new perfume for a company like Chanel.  They would put a drop of the new perfume onto an Aromyx chip, and almost magically, an image would appear on their computer screen – an “aromagraph” – representing the reaction of the human brain.

  Based on the aromagraph, the chemists would see how the brain’s reaction to the scent was similar to, or different from, existing scents on the market, and then make adjustments as needed.

  The real-world applications of a technology like this – not just for fragrances, but for consumer packaged goods, foods, beverages, and flavors – are enormous.  

  Currently, in order to test and create new products, companies spend roughly $37.5 billion every year on “human panels.”  Basically, they recruit thousands and thousands of people to participate in focus groups in order to predict how the world will respond to a new product.  That’s a time-intensive process, and costly! Aromyx not only provides a faster and more accurate tool – but at $300 per chip, it creates both a cost-effective solution for its clients, and a money-maker for itself.

This type of technology is the future of consumer packaged goods development – at least, that’s what my crystal ball says.

If the company can capture just 3% of the market, it’s a $1 billion business.

Aromyx is currently raising a round of capital from investors like you. You can see more about it on public fundraising platform, AngelList »

Pull The Trigger?

So to sum up the opportunity: an amazing technology, a multi-billion dollar market, and a company that is currently accepting investments. Should we write a check?

Not so fast!  We know first-hand how easy it is to get excited about opportunities like this and make emotional decisions.  That’s why we wrote The 10 Crowd Commandments, a free, easy-to-digest framework that helps you evaluate early-stage investment opportunity »

Let’s take a quick look at how Aromyx stacks up on the positive side of the Crowd Commandment ledger:

Market demand from paying customers: Although Aromyx’s product hasn’t yet launched, the Senior Vice President for Chemical Procurements from Proctor & Gamble (owner of dozens of brands including Tide detergent, Secret deodorant, and Crest toothpaste) said he’d “buy thousands of these right now” if the chips were available.

Straightforward business model: it costs $100 to make a chip and they sell it for $300. After subtracting the normal costs to run the business, what remains is profit.

Competition: While competition exists, Aromyx has over 29 legal patents – that will help them build defensibility.  

Strong management team: They’ve started and sold companies before.

However, our “Commandments” also give us reasons to be concerned:

While Aromyx has already received millions of dollars in government grants and funding, there aren’t any notable private investors involved – i.e., venture capitalists or angel investors who invest to earn a profit.  As we like to say here at Crowdability, it’s always good to “be a follower” in deals like this.  Following professional investors ensures that someone has negotiated competitive terms and done some serious due diligence.

Another concern is that they’re raising $2 million, but they don’t say exactly what they’ll do with the funds.  For example, will they build their team, sign up 10 new major customers, reach positive cash flow? If we invest today, what financial results should we expect?  They don’t say!  There isn’t a clear explanation in any of their materials.

So what should we do here?

My Crystal Ball

Maybe my experience with the “Apple Crystal Ball” can be of some assistance...

As it turns out, I was right about Apple launching their mobile device.  The iPhone has generated billions of dollars in value for Apple and its shareholders, and changed the entire mobile landscape.

But the stock I was so bullish on – one of Apple’s suppliers – didn’t fare so well.  The company was called Portal Player.  I say “was” for a simple reason: the company is no longer publicly traded.  Shortly before the iPhone was released, Apple announced that they would be switching to a new supplier.  It was “game over” for Portal Player, and “game over” for my investment, too.

Other than the fact that my “crystal ball” seems to have been momentarily broken, what lessons can we learn from my failed investment?

Well, for one thing, even though I was extremely excited about Portal Player, I followed my playbook for early-stage investing – an early set of rules similar to the 10 Crowd Commandments.  The most important rule I followed was this: don’t commit too much of your capital to any one stock!  Yes, despite my enthusiasm for Portal Player, I made only a small commitment to it.  I was diversified.

You see, when it comes to investing in startups and early-stage technology companies, there’s no such thing as a “sure thing.”  To protect yourself, you need to diversify, committing only small amounts of capital to speculative ideas like Portal Player – or to companies like Aromyx.

If you ultimately decide to invest in Aromyx, commit only a small amount of your available capital – and make sure to build a diversified startup portfolio by making many other early-stage investments, too!

[crowdability-blog]

Discover the Fortune That Lies Hidden Behind a New Law

What do 8 of the 10 wealthiest people in the U.S. have in common? Aside from being able to fly private, the common thread is that each of them has made their fortune thanks to a startup.

Let me explain...

From tech titans like Bill Gates and Larry Ellison (founders of Microsoft and Oracle, respectively), to retail magnates like the Walton family (Wal-Mart), it’s the equity in their businesses that has created such vast wealth.

And while it’s hard to picture these colossal businesses as the “startups” they once were, the fact is, they had humble beginnings – in many cases, just two or three people in a room with an idea.

But you don’t have to be the next Gates or Ellison in order to create wealth from startups...

Investors known as venture capitalists (or “VCs” for short) – like John Doerr from Kleiner Perkins, or Michael Moritz from Sequoia Capital, to name just two – have becomebillionaires by backing small companies.

And thanks to a revolutionary new law, everyday investors like you can invest in thesame deals as these VCs.

As one study recently showed, you could potentially triple your money in the next 5 years by creating your own “personal venture capital fund.” Let me explain...

How a Venture Fund Works

Before we show you how to create your personal venture fund, it’s important to understand how a traditional venture fund works.

Venture capitalists raise money from investors – usually large pension funds, family offices and other large institutions. The VCs will then spend 3 to 5 years investing that capital into a portfolio of early-stage companies. They hope to start seeing money flow back to them in 5 to 7 years.

Amazingly, they know and fully expect that the majority of their investments will go to zero, or breakeven at best. They understand that only a small fraction of their investments – say, 2 or 3 out of every 10 – will generate most of their profits.

This is important. It means that even the very best professional investors are wrong 70% to 80% of the time – and they still make a fortune!

The reason is simple: a successful investment can result in massive gains. For instance, Google’s earliest investors earned 3,000% on their investment in only 5 years.

In other words: those investors could have written $10 million checks into 10 different companies, had 9 of those investments go to zero (losing $90 million!) – and still they would have earned a $200 million profit. And that’s with only one winner.

Obviously, investors seek more than 1 winner out of 10, but it illustrates two important facts about early-stage investing:

1. You need to be prepared to be wrong more often than not

2. Given the likelihood of being wrong, you need to diversify!

The Study

This brings me to a very interesting study I came across.

The Kauffman Foundation – a not-for-profit organization dedicated to studying and fostering entrepreneurship – publicly released a database of historical data they had gathered. The study captured more than a decade of early-stage investing activity.

The study I’m referring to, which I’ll link to below, took the Kauffman data and ran some statistical tests on it. The goal was to determine the number of investments needed in order for an angel investor to double or triple their money.

In brief, the study concluded that if an angel were to invest in at least 20 companies, there would be a 98% chance of at least breaking even.

But if that investor backed 75 companies, there would be a 98% chance of at leastdoubling their money.

And if they made 500 investments, there would be a 96% chance of tripling their money.

You can see the full study here »

Create Your Own Fund

Those are the statistics you need to keep in mind as you create your own portfolio of early-stage investments – your own personal “venture fund.”  Which you can now do thanks to the JOBS Act – a law passed by the Obama administration that allows individual investors to fund private companies online.  You can learn more about it here »

To be clear, deciding on 75 or 500 investments is no easy task; it’s hard enough to choose one! But keep in mind that this is a portfolio you’re building, and it will be constructed over the course of several years – similar to a traditional venture fund.

So when you, as an individual investor, decide to enter the world of equity crowdfunding, you should approach it like a venture capitalist – and be thinking along similar time horizons.

Two other things to keep in mind before you run off to start your fund...

1. These types of investments are highly risky and speculative. Therefore, you should allocate only a small portion of your investable capital towards them.  If you have a $500,000 portfolio, for example, you might consider allocating, say, $25,000 or $50,000, in total, to early-stage companies.

2. In most circumstance, the shares you buy in early-stage companies are highly “illiquid” – meaning, there is no market for them, and you can’t convert those shares to cash. You need to have your eyes open to the fact that you won’t see that money again unless the company is acquired by a larger company, or goes public on the stock market. This is another big reason why private companies shouldn’t make up a substantial percentage of your portfolio.

Now that we’ve written about some of the risks and potential rewards, we’ll wrap up by saying that we’re big supporters of early-stage investing and equity crowdfunding. Before the JOBS Act, it would have been financially impossible for everyday investors to create a portfolio of 75 angel investments.

Now that you can invest just a few hundred dollars into a startup and participate in the upside, a “personal venture fund” has become a reality.

[crowdability-blog]

Two Ways to Cut Your Taxes with Equity Crowdfunding

“Startup.” Ah, what an exciting word... It brings to mind the anticipation and wealth-building potential of being part of “The Next Facebook” or “The Next Google.” But for a handful of smart investors, the word “startup” conjures up something that’s a little less world changing, but (depending on how you look at it) equally as sexy: Tax benefits. Yes, tax benefits. This isn’t widely known. In fact, a famous venture capitalist – someone who’s been making successful early-stage investments for almost 30 years – recently said, “I have never taken advantage of them.” But it’s right there in the tax code: investing in early-stage companies offers a way to cut hundreds, perhaps thousands, of dollars from your tax bill each year. If you’re actively making equity crowdfunding investments, you can do it right now. Today we’ll show you how. “Pass-Through” Businesses When a company gets started, one of the first items of business is determining what type of “corporate structure” to use – for example, an LLC (Limited Liability Company), a Corporation, or a Partnership (LLP). Each type has unique characteristics. LLCs and LLPs, for example, are known as “Pass-Through” entities. If the company earns a profit, those profits “pass through” to the individual owners from a tax perspective, and must be reported as personal income. But here’s where it gets interesting as it relates to early-stage investing. You see, profits aren’t the only thing that gets passed through to individual tax returns… so do losses. How a Loss Becomes a Gain Let’s say you recently invested in a startup that was structured as an LLC.  Chances are, the company won’t turn a profit for some time – they need to “invest” in their business now in order to generate future profits. Sure, if a company loses money for too long, it’ll go out of business. But for an early-stage startup, especially in the technology or consumer product area, running at a loss for a year or two is common. As a shareholder in a loss-making LLC, you can apply those losses against your ordinary income. This is a tactic that can help shave thousands of dollars off your tax bill each year. Where Can You Find These Companies? Check out CircleUp, which specializes in consumer product companies: many of the companies raising money there are structured as LLCs. Most of the tech companies raising money on platforms like AngelList and WeFunder, however, are “Corporations.” So this tax loophole won’t help you there. But guess what: we're also going to show you a way to save on taxes with Corporations as well... Low Taxes or No Taxes: Your Choice All publicly traded companies – Coke, Google, McDonalds, etc – are corporations.  And corporations don’t have “pass through” income or losses, which is why you won’t receive a tax benefit if McDonalds suffers a quarterly loss. For startups that are corporations, the tax issue doesn’t generally come up until the company is acquired. At this point, assuming the value of your stock has gone up, you’ll be taxed at the capital gains rate – either the short term or long term rate depending on how long you’ve owned the stock. The short term rate is almost double the long term rate. But here’s the thing: there’s a way to avoid paying either – or at least, defer paying either. Sections 1202 and 1045 of the Federal Tax code deal with something known as Qualified Small Business Stock (QSBS). These rules were put in place to incentivize taxpayers to invest in small businesses. You can go to the IRS website to read more, but here’s the gist: If you own stock in a company that’s worth less than $50 million at the time you bought it, that stock is considered QSBS. If your QSBS stock is acquired for a profit, you can avoid paying taxes on it if you invest your profit into another early-stage investment. Let’s look at an example: Let’s say you invested in a start-up a few years ago. The startup was recently acquired, netting you a profit of $100,000. If you take that $100,000 and invest it into another start-up (or several start-ups), no taxes are due. On top of that, if you hold your QSBS for more than 5 years, Section 1202 allows you to avoid paying capital gains taxes on 75% to 100% of your gain! You can find opportunities to invest in QSBS corporations on most of the equity crowdfunding platforms we feature here on Crowdability. Enjoy The Good, Defer the Bad Obviously you’ll want to invest in startups that perform well enough to provide you with a substantial return. And you can only minimize or avoid paying taxes for so long. But the strategies we’ve outlined today will allow you to benefit from the early losses of a company – as well as its future gains. Keep in mind that we’re not tax advisors, and that every investor’s situation is unique. So be sure to speak to your accountant before employing either strategy! Yes, only two things are certain in this life – but why not defer them both for as long as possible?

[crowdability-blog]

How to Find The Next Twitter

“What year is it?” That’s what I heard when I picked up my phone yesterday.  It was an old friend on the line, someone I used to work with on Wall Street. “Umm, 2013?” I replied. “Good, just checking – because based on this Twitter IPO, I thought it was 1999!” Twitter (TWTR) had just gone public. By mid-day, it had already doubled from its $26 per share IPO price. My friend is a banker. He’s a great guy, but he can be narrow-minded in terms of his focus: his singular perspective is how big his bonus gets if the market for tech companies heats up. At Crowdability, we have a different perspective. We spend our time trying to figure out how we can help you and our other readers find “the next Twitter.” Could a company like Twitter be raising capital on one of the equity crowdfunding platforms right now? Could you have the opportunity to own a piece of it for only a few thousand dollars? While it’s an exciting thought, and it’s certainly possible... the truth is, you’d have to be pretty darn lucky to stumble onto something like that. That being said, we can tell you about a way to own stock in companies like Twitter before they go public.  I’ll show you how in just a second... But first, I think it’s important to understand why it’s so unlikely that you’ll be able to consistently find a company like Twitter while it’s raising its first round of capital. A Needle in a Haystack Finding “the next Twitter” is actually more difficult than trying to find a “needle in a haystack.”  It’s like trying to find a needle in a stack of other needles. There are hundreds, if not thousands, of companies out there right now that share the same characteristics as Twitter – mass-market product, big network of users, advertising supported, etc. And most of them will end up in the “start-up graveyard.” It’s difficult – in fact, it’s borderline impossible – to formulaically go about creating a business like Twitter.  Twitter’s founders could try to do it again for the rest of their lives; it’s unlikely that they’d be able to create a company of similar scale. Venture Perspective But this does raise the question: If it was so difficult to predict whether or not the idea behind Twitter would work out, why did Twitter’s early investors feel so confident investing hundreds of millions of dollars in the business? In my opinion, it’s based on two factors: 1. Twitter wasn’t their only investment.  As we always say, if you’re going to invest in early-stage companies, you need to diversify.  That rule doesn’t just apply to individual investors; it applies to multi-billion dollar Venture Capital funds too.  Like you, they need to have a portfolio of investments – because for every “Twitter,” they’ll also have 7 or 8 losers. 2. The VCs didn’t invest in Twitter when it was an idea on the back of a napkin.  They didn’t even invest in Twitter when it had a few thousand users. Twitter raised its first major round of financing – $5 million – when it already had 300,000 active users. That’s a big user base for a new company! Chances are, a deal like Twitter would never have ended up on an equity crowdfunding platform. By the time Twitter was a proven concept, the business was too far along and needed too much capital. It’s unlikely that individual investors could have gotten access to this kind of deal. Or could they have? Pre-IPO Investing There are three ways you could have invested in Twitter before the company went public – which, based on the current stock price, would have earned you a 100% to 300% return, depending on when you invested. 1. Secondary Markets – There are several services out there that operate secondary markets for shares in private companies.  Two of the most well-known areSecondMarket.com and SharesPost.com.  Both maintain markets for popular private stocks. You could have bought shares in, say, Twitter, Facebook or LinkedIn before they went public. However, participation is limited to accredited investors only. 2. Funding Portals – Some of the crowdfunding platforms act as a “private banker” for early employees of later-stage tech start-ups.  Many employees at these companies are given significant amounts of stock – it’s meant to incentive them, and to make up for less-than-market salaries. Sometimes these employees want to “cash out” a portion of their stock before the company is acquired or goes public, So they’ll sell their shares at a discount on one of the crowdfunding platforms. Matt wrote an article several weeks ago about how Microventures (one of the high-quality portals we cover) was doing just that.  They also had Twitter stock for sale last year – from what we heard, at about $19 or $20 per share.  Buying that stock would have created a 37% return on the IPO price, and a 149% return based on the current price. Again, this type of opportunity is reserved for accredited investors only. 3. Business Development Company – But there’s also an option for non-accreditedinvestors to own pre-IPO stock. Investors who don’t have a $1 million net worth can buy shares in private companies indirectly by investing in a what’s called a “Business Development Company,” or a “BDC” for short. BDCs are formed in order to invest in private companies, but since the BDC itself is publicly traded, anyone – accredited or non – can own it, and thus participate in the upside potential of promising technology companies. One of the more popular BDCs is a company called GSV Capital Corp (GSVC).  

In fact, GSV Capital owned Twitter stock before Twitter filed to go public. If you had owned shares of GSV, you would have seen them double in price in the months leading up to Twitter’s IPO. Don't Sweat It So don’t kick yourself if you miss out on “the next Twitter” while it’s raising equity crowdfunding.  Let it go, but keep an eye on it.  Maybe it’ll turn up on a platform like SharesPost, a funding portal like Micro Ventures or in a BDC like GSV Capital. Remember, while the returns for these later-stage investments might not be as great, you’re also much less likely to see your investment go to zero and you’re still ahead of public-market investors.

[crowdability-blog]

Your Ultimate "Wingman" For Early-Stage Deals

Pop quiz! Can you name the movie these lines are from?

     Iceman: “You can be my wingman any time.”

     Maverick: “Bull@%&$! You can be mine.”

  I know, I know: that was an easy one. Val Kilmer and Tom Cruise in “Top Gun.”

  But here’s why it’s such an easy one. It’s because the dream of having a “wingman” -- someone who’s always looking out for you; someone who “has your back” -- is universal. This concept strikes a nerve with almost all of us.

  Too bad there’s no such thing as a wingman for early-stage investing. Someone who has great instincts and skin in the game; someone who always has our back.

  Actually, there is such a thing. And today we’re going to tell you about it.  

  Meet Your Wingman

  Meet Kevin Rose.  

    Would you follow this man into battle? 

  Would you cram yourself into a F-14 Tomcat and join him in combat at Mach 2?

  I’m going to take a wild guess and say… “Not so much.”

  But would you join him if he found an early-stage investment he believed in, put his money and reputation on the line, and then let you co-invest alongside him?

  If you were to ask our opinion, we'd say you should sure as heck take a quick look. 

  Here’s why...

  A Successful Entrepreneur and Professional Investor

  Kevin is the founder of Digg.com, a website that literally changed how online news and content sites operate. Anytime you see an article on the web with a "vote" button next to it (a mechanism that allows us, the viewers, to determine which articles get featured), you have Kevin to thank.

  He’s also an angel investor with an excellent track-record, having invested in dozens of successful internet and consumer technology companies -- from Facebook and Twitter to Fab and Square. And he currently works as a professional investor at Google’s venture capital fund -- in other words, investing is his full-time job.

  Kevin has a reputation for taking an an active role in the companies he invests in. As one entrepreneur Kevin backed put it: 

       “Highly recommend Kevin! One of our most valuable investors...”      -- Mike McCauley, founder of Bufferbox

  Why am I including this quote in today’s post? Because it’s important to point out that when professionals invest in startups, they don’t just “pick” a few good ones and walk away. They actively help their companies execute on their plan. They help handle the good things that arise (e.g., talking through an offer to sell the company), as well as the bad (lawsuits, slowing growth, new competitors, etc.).

  When a startup is “hot,” it can choose who they allow to invest. Based on feedback like the above (you can see more here), it’s likely that Kevin will get access to good deals -- this is one of the reasons that, in an ideal world, we’d be able to “back” him and invest alongside him.

  And now, as part of a new program from AngelList (one of the platforms we cover at crowdability), we can “back” him. 

  In fact, Kevin is offering to become our wingman.

  Let me explain...

  Syndicates

  AngelList’s new program is called Syndicates. The origin of this term comes from a common practice among professional investors whereby one investor (the “Lead” investor) takes charge of a deal, negotiates the terms, and commits capital -- and then shares, or “syndicates,” the deal with a number of other investors.

  Let’s look at how it works on AngelList using Kevin as an example.  

  Basically, Kevin sets up a “Syndicate.” He takes the lead in looking for deals (in fact, borrowing further from the lingo of traditional syndicates, Kevin is called “the Lead)” and commits to investing his own money -- let’s say $100,000 -- into each one.

  A bunch of Individual investors like us think Kevin would be a great wingman. We request to join his group as “backers.” Let’s say 15 people agree to each invest $10k in any of Kevin’s deals. Kevin now has $250k to invest into numerous deals: $100k from his own pocket, and $150k from us, his syndicate.

  Kevin doesn’t charge us anything for access to his deal flow. His compensation comes later if the deal works out well: he might receive, say, 10% of the profits, also called “the carry.”  (This would be like your stockbroker only charging you if he actually made you money -- imagine that!)  He gives 5% of the 10% to AngelList for handling the admin.

  Is This a Win-Win-Win?

  Let’s summarize the “pros” and “cons” for each of the participants at the table.

  Backers

On the “pro” side, backers like us get access to the Lead's deals, and can invest alongside them with the same investment terms. We can “fire” them at any time by opting out of future deals. And the Lead only gets compensated if they do well. 

  That’s a lot of “pros.”

  On the “con” side, since Leads aren’t required to syndicate all their deals, how do we know if we’re seeing the best ones? We don’t know -- but the fact that they’ll be concerned about their public track-record eases our concerns.

  Another con is that most Leads won’t be professional investors; they’ll be angel investors who don’t focus on investing full-time -- so they might have limited track-records, and they might not be as successful at finding and managing deals. 

  Leads like Kevin 

On the “pro” side, Leads can “leverage” their capital and reputation to write bigger checks. This will give them access to more deals, and allow them negotiate better terms.

  On the “con” side, it’s possible that entrepreneurs might not want Leads to bring so much money; sometimes they just want Kevin Rose, not us!

  Startups raising capital

On the “pro” side, startups get more capital, and spend less time going from meeting to meeting raising it. Not a whole lot of cons there -- unless they don’t want so much capital.

  Wrap Up

  Given the pros and cons, here’s our advice to you:

  If you’re going to join a Syndicate, back professional investors who do this full-time. Remember: you want a wingman who’s always going to be there for you.

  Here are two candidates:

  Kevin Rose

  Kevin is committing $150,000 per deal. He’s not charging anything for management fees or carry (AngelList still receives their 5%). He expects to do 5 deals per year. Minimum investment for each backer is $1,000 per deal. If you join Kevin’s syndicate, you’ll be in good company: check out his Syndicate page to see who else is backing him.

  BetaWorks

  Betaworks is a professional investor as well as an operator of companies. They’re an investor in such companies as Tumblr, Twitter and Kickstarter.  

  They’re committing $150,000 per deal, and charging a 20% carry. They expect to do 12 deals per year. Minimum investment for each backer is $1,000 per deal.

  (Please note: Crowdability has no official relationship with, and zero financial interest in, AngelList, Kevin Rose or Betaworks.) Good luck finding your investing wingman!

[crowdability-blog]

If Warren Buffett Invested in Startups

Investing can give you whiplash. One day it seems like you know exactly what you’re doing. The next day you turn on CNBC and some “talking head” is preaching about how wrong you are. In the late 90’s, you were “missing out” if you weren’t investing in dot-com companies. In 2001, you wouldn’t be caught dead with one in your portfolio. And now, with the outrageous success of consumer technology companies such as Google and Facebook, the pendulum has swung all the way back: Tech, bio-tech, mobile – many of us are clamoring for more. As an investor, what should you do? Try to predict trends? Follow them? Too bad there’s not a better roadmap; a less “ADD-like” method of investing. Actually, there is. And we can find the clues to uncovering it by looking at two verysuccessful investors – from very opposite ends of the investing spectrum. Mr. Value “Value is destroyed, not created, by any business that loses money over its lifetime.” This quote was pulled from an interview Warren Buffett gave back in 2001. He was discussing his rationale for avoiding money-losing dot-coms during the late 90’s – a time when it seemed like everybody else on the planet was pouring money into them. Buffett’s position on avoiding technology stocks led many to dub him – and his investing framework – as “outdated.” Remember, at that time, professional and amateur investors alike were making fortunes in the market. And it seemed that guys like Buffett – who were basically sitting on the sidelines – were missing out. Needless to say, Warren did just fine. He’s still one of the Top 3 Richest men in the world, still investing in companies like Coca-Cola, and still beating the market. Does that mean Warren was right and everyone else was wrong? The answer isn’t so cut-and-dried... Tech Investors Have Done Well Too Let’s take a look at a technology investor who was around both before and after the dot-com bubble. He’s done very, very well for himself. His name is Fred Wilson. Fred is the co-founder and managing partner at one of the most successful early-stage venture capital firms. It’s called Union Square Ventures.  He’s invested in many successful start-ups including comScore (now public), Geocities (acquired for $5 billion), Twitter (about to go public), Tumblr (acquired for $1 billion), and the list goes on and on. He tends to look at companies and investments a bit differently than Buffett. For example, things like current profits (or lack thereof) don’t necessarily concern him. In fact, he wrote a post on his blog last weekend summing up his thinking regarding how he sees businesses and investments over the long term » In his article, Fred talks about publicly-traded companies that are currently losing money – but still commanding multi-billion dollar market caps. Fred argues that these losses are intentional; that the company’s managers could turn losses into profits at any time. All they’d have to do is invest less in future growth. Start-ups are essentially doing the same thing. They’re not “losing money;” they’re making an investment in their future. Does this mean Fred is right?  Is the road to riches paved with profitless tech companies? What Should You Do? These are clearly two very different schools of thought when it comes to investing. But instead of looking at what makes them different, let’s look at some of the things they have in common: 1. Long-term Thinkers:  Both Buffett and Wilson take a long-term view of their investments. Buffett is clearly unmoved by the pundits on CNBC. He’s been investing exactly the same way for decades, and been through multiple market cycles. The internet start-up trend didn’t phase him at all; he was playing a long, stable hand. Same with Fred. After the dot-com meltdown, many “tech investors” suddenly had zero interest in the sector. Fred believed in the power of technology and its ability to change the world… maybe not right away, but certainly over time. He kept right on investing in new companies – and he’s continued to do well. 2. Invest in What You Know:  Buffett has often said that he doesn’t avoid tech stocks because he thinks they’re inherently “risky;” he thinks they’re risky for him because he doesn’t know enough about the tech sector. What he knows about is insurance, consumer goods and finance – which  explains his investments in companies like Coca-Cola, Goldman Sachs and Geico. Fred, on the other hand, has been an early-stage technology investor his entire career. And before he was a VC, Fred attended MIT where he studied Mechanical Engineering. Technology is in his DNA – it’s what he knows, which explains why this is where he invests. 3. Frameworks:  These two investors don’t throw darts at the wall to pick their investments. They create an investing framework – a filter. By putting a potential investment through their filter, they can determine its merit. Buffett’s framework, for example, involves looking for companies in specific industries, trading at prices that denote “value.” Wilson’s involves getting into certain types of technology companies very early – companies that can gain “network effects,” for example, where the value of a product increases as more and more people use it. Think Facebook, or Twitter, or social games. Without a stable framework, it’s doubtful that either investor would be as successful as they are today. Given the recent excitement around technology companies, equity crowdfunding, etc., it seems that investing in start-ups is once again back in vogue. But if you jump into equity crowdfunding because it’s “trendy,” you might lose the confidence to stick around when the waters get choppy. Keep in mind: sailing through choppy waters is one of the hallmarks of both Buffett and Wilson. They play the long-hand – and it’s led to wealth creation. So if you’re thinking about investing in early-stage companies, do it by following both Buffett and Wilson. Think in terms of years, not months. Stick to industries you know or can understand. And have a framework that you can apply consistently! We try to help you develop a personal framework in our report: The 10 Crowdfunding Commandments »

If you haven’t already read it, we recommend you get started today!

[crowdability-blog]

Crowdfunding Deal Up 40% in 6 Weeks?

Here’s a mystery to solve:

  Last month, on a sunny Sunday afternoon, I strolled up Broadway and bought a pound of shrimp from a fancy seafood market called Citarella.

  These weren’t just any shrimp. They were “Extra Jumbos” from the Gulf of Mexico. I spent $10 for them -- and later that day, they found their way onto my grill. 

  Yesterday after work, I headed back to Citarella for another pound of the exact same shrimp. (Yes, they’re that good.) The price had climbed to $15. I chalked up the increase to normal fluctuations – change of seasons, increase in demand, etc. – and moved on.

  But when I made it home after shopping and got back online, I encountered a secondprice spike -- and this time there was no easy explanation for it. In fact, it was shocking: in six weeks, the price of an equity crowdfunding deal I’d been following had climbedmore than 40%. 

  What in the world would make the price of an early-stage investment climb so dramatically, so quickly? Unless a private company is showing signs that it’s the next Facebook or Google, its price either grows slowly over time, or more frequently, remains relatively static. Was something “fishy” going on?

  Let’s solve this mystery. And then let’s see what it means for your portfolio.

  A “Mutual Fund” For Start-Ups, Take 2

  The “deal” I’m referring to above is a bundle of start-ups. It’s similar to a mutual fund.

  There are 11 start-ups in the bundle -- and they’ll soon graduate from a prestigious mentoring program called TechStars. 

  The start-ups, all based in Seattle, Washington, have impressive people involved: engineers from MIT; managers from Microsoft; even a founder who successfully sold his prior start-up. 

  They also have promising ideas (including a video “lifelogging” platform for Google Glass), and the backing of top-notch professional investors including SoftBank Capitaland RRE Ventures.

  The opportunity, in brief, is to invest in all 11 companies at once. One investment, one check, 11 companies -- with TechStars providing vetting and ongoing management, and one of our preferred crowdfunding platforms, AngelList, providing hosting and administrative help. 

  With start-up investing, where only a small percentage of companies will succeed, this type of diversification and professional management can be a smart move.

  Sound Familiar?

  If you read Crowdability’s popular post from September 18, “A ‘Mutual Fund’ For Start-Ups,” this type of opportunity might ring a bell.

  Back then, we wrote about a bundle of early-stage companies from a differentTechStars’ class – one from Austin, Texas. 

  They had the same great mentoring as TechStars’ Seattle class, the same kind of great people and promising ideas, and the same odds of success. They just graduated a little earlier. 

  And yet, the Seattle class is 40% more expensive than the Austin class. 

  What Does "More Expensive" Mean?

  But what does “more expensive” means in the context of start-up investing?

  Simply put, when you’re investing in an early-stage company, the lower its “valuation,” the greater your upside potential.

  As a simplified example, if you invested in a company when it was valued at $5 million, and it sells for $20 million, you’ll earn a 4x return. But if you invested when it was valued at $2 million and it sells for $20 million, you’ll earn a 10x return.

  For the bundle of start-ups from Austin, the valuation was $3.2 million. That’s reasonable: as a comparison, the average valuation of companies listed on AngelList since 2010 is $3.8 million.

  But for the bundle from Seattle, the valuation climbed to $4.5 million – there’s the 40% increase we keep mentioning.

  Maybe such a fast and significant price increase is palatable for a pound of jumbo shrimp -- but for start-ups, that’s worthy of a red flag.

  A Sea of Liquidity

  Shrimp aren’t liquid just because they come from the sea. They’re “liquid” because millions of pounds of them change hands constantly, with many factors determining the price range at which they’re bought and sold. 

  Start-ups raising crowdfunding capital aren’t liquid in the traditional sense; their shares rarely change hands. But crowdfunding creates a new type of liquidity: a sea of real-time feedback from online investors.

  Essentially, start-ups raising capital can see, in real time – and probably for the first time ever – what the actual demand is for their funding round. Not just what a few professional investors think – but what the world of investors thinks. 

  They can base it on such data as the number of visitors they’re getting to their funding page, how many people are “following” their deal and requesting regular updates about it, and how many people are clicking “Invest Now” and wiring in their funds.

  If a start-up is “hot,” it can finish its crowdfunding round quickly – in a matter of days, for example, sometimes even less. Or, as we’re seeing in the case of TechStars, perhaps it will raise its price. This transparency and deal liquidity is a unique and fascinating byproduct of equity crowdfunding.

  Seattle Vs. Austin

  In the case of TechStars’ Seattle class, this liquid feedback is telling us something clear: at the moment, investors see value in companies that have graduated from TechStars, and value in the “bundled” approach to investing.

  Was the Austin class “underpriced” at $3.2 million? At the time, given the available information, probably not. But the market has quickly woken up to the opportunity -- and $4.5 million is the number the market has settled on as the “fair” price.

  Take Away

  If you’re interested in getting access to TechStars’ most recent bundle of companies,you can learn more here. (Crowdability has no official relationship with TechStars or AngelList, and no financial interest in either them or the start-ups in TechStars’ Seattle or Austin class.)

  Early-stage valuations in the $2 million to $5 million range are “normal,” so a $4.5 million valuation shouldn’t scare you away. 

  That being said, we need to keep an eye out for valuations creeping (or springing) up, and for “bubbles.” With the sea of real-time feedback becoming the “new normal” for equity crowdfunded start-ups, it’s easy to see how “hot” private deals could have their price bid up. 

  While it’s great to see more companies getting funded, the fact is, early-stage companies with late-stage (i.e., high) valuations means more risk for investors!

  This is a new and exciting world. It's filled with risk and opportunities. We hope Crowdability’s articles are helping you better understand and navigate the equity crowdfunding ecoystem. Please email us with your questions so we know what you’re wondering about. We’ll do our best to write articles that address your questions. 

  You can always reach us at [email protected].