Have you ever watched the show Shark Tank? Great show, right? If you’re like me, you watch that show, and you immediately wish you could be a shark yourself, and invest in new, exciting startup companies. Over the past few years, technological advancements and legislative changes have made it so, yes, you can be a shark investor. Readers, meet equity crowdfunding — a recent, innovative mechanism that allows us retail investors to invest directly in the world’s hottest startup companies through online crowdfunding sites, such as SeedInvest or StartEngine.
The details of equity crowdfunding can be quite complex. The big idea not so much. It’s investment opportunity democratization. Before, only rich venture capitalists had access to investing in the next Apple (NASDAQ:AAPL) or Facebook (NASDAQ:FB) while they were still small, private companies. Now, everyone can do it, meaning you can juice up your portfolio today with some high-risk, high-reward startup investments.
On risk, InvestorPlace recently spoke via email with Laura Gonzalez, Associate Professor of Finance at California State University Long Beach, about private investing during the Covid-19 pandemic:
“The current bear market is expected to last approximately one year, compromising the employment of close to a third of the workforce according to employment by industry. By then a vaccine should be available, but the financial markets are going to assess risk differently. In globally connected markets pandemics spread quickly, and investors will factor in other likely future pandemics. The success of equity crowdfunding will depend on businesses being able to signal access to a flexible market, mastery of technological means, and ability to rely on a high-quality more domestic oriented supply-chain. In addition, volatility in financial markets will evidence further the fragility of those cryptocurrencies that are not backed by a regulator or government related financial institution.”
Why would you want to invest in a world whose fabric is sewn with risk? Because all it takes is one home run hit in the startup world to make you fabulously wealthy.
Let’s say you invest in 10 cool new startups. Nine of them will probably fail. But, if just one succeeds and returns you thousands of percent on your initial investment, then your whole portfolio of nine failed startups and one success is up huge.
How else do you explain the fact that the average venture capital (VC) fund returns around 20% per year? That’s double the annualized return of the S&P 500.
Needless to say, every investor should — at the very least — start looking into the equity crowdfunding space.
With that in mind, here’s a list of three strong startups to invest in on SeedInvest:
- Trust Stamp
Startup Companies to Invest In on SeedInvest: NowRx
Arguably the best and most successful startup to invest in right now on SeedInvest is NowRx.
NowRx is an on-demand e-pharmacy that has leveraged technology to construct a pharmacy ecosystem wherein consumers don’t have to leave their homes to get their prescriptions filled.
The process is simple.
- Consumer visits doctor.
- Doctor prescribes medicine.
- Consumer goes home, logs into NowRx app, and confirms a good delivery time.
- From one of its small, automated packing facilities, NowRx’s robots assemble the prescription, a NowRx driver picks up the prescription and delivers it to the consumer.
Sound way easier, faster, and more convenient than driving to the local physical pharmacy, waiting in line, getting the prescription and driving back home?
Consequently, this on-demand virtual delivery process is the future of the pharmacy industry — and, thanks to its market-leading automation technology (they actually have robots which assemble the prescriptions in record fast time) and data-driven software advantages (the company has created a uniquely awesome centralized online platform where customers can manage their prescriptions), NowRx is the future of Amazon of this space.
To that end, if you’re looking to invest in the next Amazon, look no further than NowRx.
Another one of the best startup companies to invest in on SeedInvest is Graze.
Graze is a pre-revenue company that has developed a fully-autonomous, robotic commercial lawnmower. That’s a big deal, since the $54 billion U.S. commercial landscaping market has a few big challenges today, including high labor costs, big fuel costs, significant safety-related risks and costs, and over-pollution.
Graze’s fully autonomous, electric lawnmowers address and eliminate all of these pain-points. The mower reduces a 4-man landscaping team, to a one mower and 2-man landscaping team, resulting in 50% labor savings. Fuel costs come down to zero. Safety risks are eliminated, and safety costs come down to zero. Pollution similarly drops to zero because Graze’s mower are zero-emission.
In other words, Graze’s next-generation mowers represent the future of U.S. commercial landscaping. This future is already starting to materialize. Graze has signed LOIs from LandCare and Mainscape, two of the top fifteen commercial landscaping companies in the U.S. The LOIs are for the purchase of 400 lawnmowers, the first of which Graze expects to ship out in 2020.
But this is also just beginning of Graze’s journey. Over the next five to ten years, Graze’s mowers have a unique opportunity to achieve ubiquity across this $54 billion market.
As that happens, this $23 million startup could turn into a multi-billion-dollar company one day.
Startup Companies: Trust Stamp
Last, but not least, on this list of the best startup companies to invest in on SeedInvest is Trust Stamp.
Trust Stamp is an innovative business built for modern cybersecurity.
Long story short, there are three things which are inevitable in life: death, taxes and cyber-attacks. In 2018, nearly half a billion personal records were stolen by cyber criminals, equating to roughly 15 personal records being stolen every second of every day.
In response to this huge swarm of cyber-attacks, companies and consumers alike are pivoting to biometrics (the biometrics service market is expected to grow by nearly 200% from about $16 billion in 2018, to nearly $50 billion by 2025), on the idea that things like facial recognition and finger ID are much harder for cyber criminals to steal and replicate than passwords.
That’s true. But they aren’t perfect. Biometric data still gets compromised all the time. In the first half of 2019 alone, there were 3,800 biometric data breaches. And, when biometric data gets stolen, it’s a much bigger deal, because you can’t change your thumbprint or your face ID.
Consequently, the increasing ubiquity of biometric data guarantees the increasing ubiquity of biometric security solutions.
Insert Trust Stamp, who leverages a proprietary deep neural network algorithm to anonymize biometric data, so that it cannot be traced back to an identity unless done so with Trust Stamp’s probabilistic AI matching algorithm. It’s a genius — and arguably perfect — way for companies and individuals to secure their biometric data.
Over the next five to ten years, as the use of biometrics proliferates across the globe, the deployment of Trust Stamp’s biometric security solutions will similarly proliferate everywhere, paving the path for this to one day be a multi-billion-dollar company.
Luke Lango is a Markets Analyst for InvestorPlace. He has been professionally analyzing stocks for several years, previously working at various hedge funds and currently running his own investment fund in San Diego. A Caltech graduate, Luke has consistently been rated one of the world’s top stock pickers by various other analysts and platforms, and has developed a reputation for leveraging his technology background to identify growth stocks that deliver outstanding returns. Luke is also the founder of Fantastic, a social discovery company backed by an LA-based internet venture firm. As of this writing, he was long FB and AMZN.