Thanks to the groundbreaking Title III of the Jumpstart Our Business Startups (JOBS) Act, Americans now have access to equity crowdfunding ventures. To accommodate this radical shift in our laws, private investing platforms like MicroVentures have risen to connect burgeoning organizations with a new breed of speculators. Further, given the broader progression of technology, there’s never been a better time to invest in startups.
Typically, when most people think about investing, they’re thinking about Wall Street and the major indices such as the Dow Jones or the S&P 500. But before publicly traded companies entered the big show, they first started off as an idea. From there, concepts turned into business propositions to high-dollar backers. What’s changed now with the JOBS Act is that the public can now invest in startups.
Reasons to Invest in Startups
For those new to the concept, these are some of the big picture reasons why you may want to consider investing alternatives such as equity crowdfunding:
- Early-bird investment opportunity: With communities such as MicroVentures, investors have an opportunity to get in on the ground floor of a potentially viable business. Though the risks are high, the profit potential is explosive. Imagine if you got in on Amazon (NASDAQ:AMZN) or Apple (NASDAQ:AAPL) when they were operating out of garages … enough said.
- Left-field innovation: By the time a company goes public in a major exchange, the underlying business has been vetted a million times over. Therefore, you’re probably not going to find something that hasn’t already been analyzed. But when you can invest in startups, you may find innovations that have simply fallen through the cracks. This gives you a chance to exercise a high-conviction bet that others have not had a chance to realize.
- Initial public offerings are unpredictable: Placing a bet on an IPO simply isn’t the same as deciding to invest in startups. Along with the “nothing new” issue mentioned above, IPOs are wildly unpredictable. And those who have invested earlier in the game can dump shares on the johnny-come-latelys.
Although equity crowdfunding offers an exciting alternative to traditional investment vehicles, you should be aware of the myriad risks. Primarily, private securities have a limited marketplace. While MicroVentures does provide secondary trading, this arena isn’t nearly as convenient as trading blue-chip stocks as an example.
Also, the majority of startups fail. Therefore, you should only invest capital that you can afford to lose. And it pays to have a diverse portfolio in case some of your bets don’t pan out.
If you’re still onboard, here are five startups to consider on MicroVentures.
Usually, when individuals find themselves needing a loan, they turn to the big banks. Obviously, with the amount of resources that the banking giants have, they can collectively invest billions in advertising platforms. But what many don’t appreciate is that smaller, local institutions may offer superior rates. As well, because local institutions are part of the community, borrowers receive better service.
With Lend-Grow, the company provides an online lending marketplace, serving to connect borrowers with local banks and credit unions. Here, Lend-Grow provides a win-win ecosystem. First, the borrower benefits from competitive rates. Second, local lenders can grow their portfolio with warm to hot leads which would otherwise be sucked up by the big banks.
Better yet, major institutions see the value in Lend-Grow’s convenient, intuitive platform. For student loans and refinancing options, the company has partnered with Ascent Funding, INvestEd, Nelnet, and Citizens Bank. On the personal loans end, Lend-Grow has partnered with Blue Ridge Bank, with an anticipated launch in September 2020.
Lend-Grow is currently accepting investments, with a minimum commitment of $100. To learn more, head on over to the company’s profile on MicroVentures.com.
According to a Forbes’ article, just a fifth of the global workforce perform their jobs behind a desk. This translates to 2.7 billion people who make up the “deskless” workforce. Because of the nature of their jobs – raging from customer service to infrastructural operations – they may not have access to communication platforms that could enhance their productivity.
That’s where goDeskless comes in. As a cloud-based software, goDeskless helps client organizations streamline their communication protocols through digitalization technologies. Further, by offering its services as a third-party vendor, goDeskless democratizes the deskless revolution.
For instance, companies like Uber (NYSE:UBER) or Lyft (NASDAQ:LYFT) can end up spending millions to develop proprietary infrastructure to aid their deskless workforce. With goDeskless, more organizations can theoretically advantage the deskless business model, saving costs and promoting greater efficiencies.
Plus, with the novel coronavirus disrupting the very nature of work, goDeskless has received a burst of relevance. Currently, goDeskless is offering convertible notes with a minimum investment of $100.
The Car Savior
As an online car repair diagnostics tool and marketplace, The Car Savior may cause some concerns for those seeking to invest in startups with a longer-term upside pathway. Specifically, the surge of electric vehicles with their inherently more reliable platform may initially dissuade you. However, the facts suggest that The Car Savior may be far more relevant than you might think.
Yes, companies like Tesla (NASDAQ:TSLA) have proven that EVs are viable. Not only that, demand for Tesla vehicles has accelerated. Nevertheless, we’re talking about deliveries in multiples of thousands, not millions, as is the case with combustion-engine cars. Even in the depths of the Covid-19 crisis in April, total vehicles sold numbered over nine million.
So no, combustion isn’t going away anytime soon. Therefore, you can invest in startups that are levered to “analog” automotive technologies.
Furthermore, the pandemic may result in a prolonged recession. In that case, consumers will be more willing to invest in repairs rather than buying a new (or new to them) car. Thus, The Car Savior may have plenty of growth in the tank.
Offering convertible notes, The Car Savior requires a minimum investment of $100.
We all know that Americans love their pets. So much so that the pet care industry has blown up into a $75 billion-plus industry. But does this love for our furry friends translate overseas? That’s one of the compelling questions driving India’s Petpal.
Billed as a “one-stop online platform for Indian pet owners to get the food, medicine, and accessories they need to keep their pets happy and healthy,” Petpal represents an intriguing proposition among equity crowdfunding. As I stated, we know that Americans will do anything for their pets. Arguably most Americans would at least consider the idea to invest in startups associated with U.S.-based pet companies.
However, India may be a potential gamechanger. As you know, the country has been a viable emerging market over the years. Even with the Covid-19 disaster, India may be able to eek out a 3% to 4% GDP growth rate in 2020. And the rise in economic power has meant that individual Indian consumers are enjoying luxuries such as pet ownership.
So far, more than $61,000 have been raised from 132 investors. If you’d like to take a shot at Petpal, the minimum investment is $100.
Wind Craft Aviation
Wind Craft Aviation is truly emblematic of the reason why so many invest in startups. Featuring a hydrogen-powered Electrical Vertical Take-Off and Landing (eVTOL) aircraft, Wind Craft Aviation promises to be a disruptive force in the air transportation market.
For one thing, the company’s eVTOL aircraft is powered by a carbon-neutral fuel cell, which of course is much more environmentally friendly than traditional aircraft. Further, the fuel cell is more efficient than traditional lithium-ion batteries, enabling greater range. Though the target aircraft looks like something out of a science fiction movie, the company has plans to launch its first test flight this year. In addition, the organization will start beta testing in foreign markets next year.
Best of all, Wind Craft Aviation is getting serious attention. Notably, the company was awarded a grant from PlanetM to develop its eVTOL craft and test it at various military sites.
Not surprisingly, investors are very keen to put their capital to work, with Wind Craft Aviation attracting nearly $226,000. If you want to take part in this equity crowdfunding opportunity, Wind Craft is currently accepting reservations.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. As of this writing, he did not hold a position in any of the aforementioned securities.