Recently, I came across an editorial from a famous market pundit that declared the stock market will continue moving higher. Maybe he’s right and maybe he’s not. The thing is, the only truth in the public equities sector is that no one knows for certain what will happen next. Given such unpredictability, you may want to consider diversifying into private investing, specifically equity crowdfunding.
At first glance, that might seem like a dangerous concept. Multiple resources cite that a majority of startups — we’re talking to the tune of 90% — fail. You can dive into the myriad reasons for the failures — perhaps the product wasn’t relevant or the consumer base wasn’t ready for the innovation. But the point is, private investing ventures are risky. So, why bother then with equity crowdfunding?
First, diversification is crucial, especially during these uncertain times. In the stock market, you can put your money into top-notch blue chips. But at the end of the day, if we suffer a wide-ranging economic slowdown, this will likely affect the vast majority of public equity opportunities. On the other hand, equity crowdfunding is generally immune to outside rumblings. Essentially, the illiquid nature of private investing exchanges inherently prevents rapid-fire speculation.
Second, you don’t need to invest so much money to see significant returns in your successful equity crowdfunding wagers. Let’s say you bought stock in a private enterprise for a buck a share. If that company down the road has an initial public offering, you could see massive returns on your initial cash outlay. True, most of your picks will be duds. But with proper money management, private investing could work out very nicely.
Third, many public market participants wish they could invest on the genuine ground floor. With private investing, this is about as close to the ground as you’re going to get. By directing a modest portion of your speculation funds to this unique arena, you expose yourself to the possibility of lifechanging gains. So with that, here are this week’s equity crowdfunding opportunities to consider.
- FirstRoot
- Hercules Electric Vehicles
- EnergyX
- Strom Motors
- Austin Flipsters
- Dronedek
- SelfDecode
One note before we dive in. Please be aware that if you find a company you like, you should prepare yourself for the long-haul journey. Some organizations may take several years to reach the IPO phase, if they ever get there at all. Above all, practice disciplined money management and extreme due diligence when assessing these equity crowdfunding opportunities.
Equity Crowdfunding You Should Invest In ASAP: FirstRoot
With seemingly everyone bidding up housing prices to the moon, this unprecedented dynamic belies the fact that the U.S. has a financial literacy and education problem. According to NFCC.org, its 2019 consumer literacy survey revealed that one in two Americans who attempted to purchase a home faced challenges in closing the deal.
Now, you can’t comprehensively blame financial illiteracy for such acquisitional setbacks. After all, rising home prices and stagnant wages make it increasingly difficult for anyone but the ultra-rich to make it. However, proper money management skills can certainly help close many gaps. But the problem is that education is best started early, which is where FirstRoot arrives.
Listed on the popular equity crowdfunding platform Netcapital, FirstRoot specializes in teaching financial literacy and civics to young students. But rather than bombard them with facts that they will only regurgitate in a pop quiz or examination, the company takes the bold step of allowing students to make real monetary decisions that directly impact their schools.
Through the FirstRoot platform, kids learn how to setup a proposal for various projects they would like to see implemented on campus. Next, they learn negotiation and budgeting skills, among other skill sets, all while working toward a democratized goal.
This equity crowdfunding play screams ESG (environmental, social, governance). For more information, please visit FirstRoot’s private investing profile on Netcapital.com.
Hercules Electric Vehicles
You’d have to have been cryogenically frozen over the last decade or so to not realize the tremendous gains that the electric vehicle (EV) industry has been making. While on an overall basis, EVs still only account for a fraction of current auto sales, interest in the electric platform is only growing.
Even more surprisingly is that EVs don’t just cater to the young. True, Generation X and millennials represent the lion’s share of EV customers. However, according to data from Experian.com, baby boomers represent the third-largest customer demographic for EVs — and it’s virtually a tie with millennials.
Thus, the demand exists. It’s just that EV manufacturers must find a way to bring costs back down to earth. Hercules Electric Vehicles, another equity crowdfunding opportunity on Netcapital, might have the right solution. Focusing on customized, high-performance electric mobility, Hercules stands out for its modular manufacturing platform.
In contrast, many automakers utilize a one-size-fits-all skateboard frame, which according to Hercules limits the ability “to utilize the technology across different segments or industries.” By going with a modular and scalable approach, the company can address multiple, even disparate demand channels and at efficient cost structures.
To find out more about Hercules’ innovative approach, check out its pitch deck on Netcapital.com.
Equity Crowdfunding You Should Invest In ASAP: EnergyX
A few weeks ago, I discussed the private investing opportunity of EnergyX, one of the groundbreaking technology firms listed on Netcapital. Given the interest in all things EV related, if you’re considering Hercules Electric Vehicles, you may also want to spare some equity crowdfunding love to EnergyX. Here’s why.
While EVs are gradually dominating the automotive discourse in large part for its environmentally friendly nature, that’s not necessarily the case across the board. As EnergyX’s pitch deck states, lithium mining, extraction and production takes a long time, typically 18 months on average. As well, miners only extract about 30% of total lithium from salt brines.
With the time it takes to extract lithium along with onerous extraction processes, the environmental impact cannot be ignored. But that’s also why EnergyX exists — to bring exciting lithium technologies to the 21st century.
Working with Dr. John Goodenough, the Nobel-winning inventor of the lithium-ion battery, EnergyX is research and developing technologies that recover up to 90% of lithium from salt brines. This will help feed burgeoning global demand while making the overall extraction process much more efficient.
Also, through Dr. Goodenough’s assistance and acumen, EnergyX seeks to develop lithium-ion batteries that feature exponentially more capacity: smartphones that can hold charge for a week or an EV that can drive for 1,000 miles on a single “fill up.”
To learn more about this exciting opportunity, check out EnergyX’s equity crowdfunding page on Netcapital.com.
Strom Motors
Staying on the EV theme, the growing popularity of electric transportation has not only transformed the public markets but also the equity crowdfunding space. Furthermore, not every manufacturer is competing in the full-sized EV space. In the case of Strom Motors, one of the private investing opportunities listed on Republic.co, it’s focusing not just on minimizing environmental impact but the physical footprint as well.
Strom Motors answers the question, do EVs really need to be as bulky as their combustion-engine counterparts? Here, the answer is a resounding no. Featured on an episode of Meet The Drapers, Strom-branded EVs are extremely compact. Yet they’re also utilitarian, allowing for side-by-side seating.
Better yet, with minimalism being the theme, the company’s flagship Strom-R3 is priced just right at $9,000. That fits perfectly into most households’ budgets, who may be curious about making the transition to electric but not $40,000 curious. At the same time, the Strom-R3 competes surprisingly well against rival offerings. For instance, it has a stated range of 125 miles — just unbeatable for the price.
Also, Strom Motors has plans to move into the delivery vehicle business, which should prove very viable. Given that the last-mile problem is onerous for combustion-based vehicles, Strom’s EVs could help bridge the technology-versus-economics gap. To learn more, check out Strom Motors’ investor prospectus on Republic.co.
Equity Crowdfunding You Should Invest In ASAP: Austin Flipsters
Easily one of the most remarkable phenomenon over the trailing year has been the sharp rise of housing demand. I remember reading a story about a couple who were about to close on a house right before the pandemic. Fearing a catastrophic market event, the couple asked for a discount on the house, which the seller refused.
Good on the seller but a gut-wrenching mistake for the buyer. Now, the couple found themselves out of a home that would have been a killer deal and into what would later become a profoundly skewed sellers’ market. Sometimes, you can’t let those nickels cost you the dollars.
Anyways, certain markets have outperformed others. With Austin Flipsters Portfolio 1, another equity crowdfunding play on the Republic.co platform, you have the opportunity to invest alongside YouTube’s number one house flipping channel, Austin Flipsters.
As the brand name suggests, this private investing offer specializes in buying, renovating or upgrading and selling homes in the Austin, Texas market. One of the top destination spots for millennials based on its cosmopolitan ambiance and generally lower cost of living, Austin has really boomed following the initial onslaught of the novel coronavirus.
Furthermore, this investment allows you to build wealth in a viable market without having to spend much time — perfect for busy professionals. To learn more, check out Austin Flipsters’ pitch deck on Republic.co.
Dronedek
Thanks to the mass proliferation of e-commerce, consumers today no longer consider physical retailers as their only channel to get the products they want and need. Increasingly, delivery options are getting quicker and much more convenient. Of course, with advanced technologies and delivery solutions come nefarious activities.
According to C+R Research survey, “More than one-third (36%) have been a victim of package theft. Of those, 44% have had a package stolen at least twice.” That’s just a staggering statistic that’s probably only going to get worse. Often, packages from well-known e-commerce brands may carry products worth hundreds of dollars. From a criminality perspective, it’s a relatively low-risk, high-reward “venture.”
Fortunately, Dronedek, a technology-based equity crowdfunding opportunity listed on WeFunder.com, aims to solve this and other disruptions against package shipments, such as inclement weather, through its smart mailbox and drone delivery service.
In a nutshell, Dronedek is a comprehensive solution, featuring a connected mailbox system that’s completely enclosed and stays that way unless accepting packages via drone. This way, consumers don’t have to worry about whether their expensive item will be safe. Instead, Dronedek’s smart mailbox will protect your purchases from both the elements and criminal activity.
To find out more, please visit Dronedek’s private investing pitch on WeFunder.com.
Equity Crowdfunding You Should Invest In ASAP: SelfDecode
Over the last several years, various social initiatives have strived for unity among the rich communities in the U.S. And that’s wonderful from a societal perspective: with so much junk going on in the world, we could use common bonds and understanding.
But biologically, the fact remains that people are different. In 2019, the New York Times ran an article about how blood “can be racially or ethnically specific, so having more blood donors in certain groups can be crucial for saving the lives of patients who share their backgrounds.”
It’s a fascinating piece, one that makes you think about the diverse beauty of the human species. It also raises a critical question: why does our healthcare system try to push a one-size-fits-all solution for our personal medical needs?
That’s why I’m glad SelfDecode, an equity crowdfunding play listed on WeFunder.com, cuts through the noise and offers personalized health recommendations based on our DNA. Through SelfDecode’s system, which utilizes artificial intelligence to scour through tons of data, users enjoy specific guidance regarding their health, ranging from diet, supplement and lifestyle recommendations.
Naturally, SelfDecode’s users are incredibly happy with the platform because it speaks exactly to their needs. To find out more information, please check out SelfDecode’s investor prospectus on WeFunder.com.
Investing through equity and real estate crowdfunding or asset tokenization requires a high degree of risk tolerance. Despite what individual companies may promise, there’s always the chance of losing a portion, or the entirety, of your investment. These risks include:
1) Greater chance of failure
2) Risk of fraudulent activity
3) Lack of liquidity
4) Economic downturns
5) Dearth of investor education
Read more: Private Investing Risks
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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.
