Appropriateness of Investing In Crowdfunding
Is investing in crowdfunding for everyone?
The possibility of investing in unique assets can sometimes overshadow the most important question when making an investment: “Is this investment right for me?” There many factors that an investor should consider when determining the appropriateness of an investment in crowdfunding. We loves to see investors getting involved with crowdfunding and contributing to companies on the platform, however we also have each and every investor’s best interest at heart. This means stopping for a minute to discuss considering the appropriateness of investing using reg cf.
Do you understand the risks?
Although investing can be extremely lucrative, it can also go the other way! For this reason, it is important for each investor to understand the risks associated with an investmenting. Risks include but are not limited to:
Illiquidity – Investments on the platform are generally illiquid. We does not offer a market for selling securities once an offering closes and the regulation set forth by the SEC contains additional restrictions on resale of your equity.
Speculative – The terms set by the issuer in crowdfunding are generally speculative. This just means that companies generally set their own terms, which includes their own evaluation. For this reason, among many others, it is critical that each investor do their own research and utilize all educational resources provided to them.
Loss of Some or All of Your Investment – Investments on the platform are considered high risk. These are investments and, unfortunately, not all investments succeed! If an investment is unsuccessful, you risk losing your entire investment.
Again, it is critical that each investor do their own research and utilize the educational tools provided to them through the platform and beyond. We provides this educational blog, an extensive FAQ page, additional educational pages, as well as communication gateways with the issuers to ask additional questions. Please use all of these resources to your advantage!
Can you afford to lose your entire investment?
When making an investment on the platform or elsewhere, it is critical to consider if you can afford to lose your entire investment. Since the risk of losing your entire investment exists, as well as the inability to access the funds due to the illiquidity of your investment, you must ensure that you can survive without those funds.
Investmentsing should not be undertaken with funds that you need. Funds used to invest should be extra money that you can afford to risk in return for the potential returns resulting from the issuer succeeding.