Blockbuster 47x (4,670%) return on your investment? No, it is no Crypto or Tech Stocks! It is…
Hi Friend, today I want to bring a new kind of investment opportunity which is not known by most investors. Yes, it is not Airdrop, not a crypto coin/token or its diminishing staking, Not even new tech stocks from USA!
You might be aware of many Startup companies which go to private investors directly for funding. It is very trendy for founders to go & build a basic product or service and then go to investors on the specific platform for more funding to further extend those products/services. It also gives them free marketing!
The keyword you are looking for in this process is called “CrowdFunding”.
Though we have many crowdfunding platforms but today we are going to talk specifically https://www.crowdcube.com/.
There are many success stories that CrowdCube has been part of in the last few years. Few years ago, Freetrade did the initial round of fundings on CrowdCube. Then last year, 1,063 earlier shareholders in Freetrade sold £5.8m of shares via its platform and those investors celebrate a 47x (4,670%) return on their investment, with six shareholders becoming millionaires as the company valuation skyrocketed from £2m to £265m! Yeah, read it again!
Now that was the easy part to let you know about the platform but what is the most difficult part of this process is to identify the start-up or semi-mature companies to invest in. In the last two years, I have reviewed at least 500+ companies on their platform for investment & carefully invested into 7 companies based on my benchmark. yeah, I am going to explain that too.
My Benchmark Points
1. You should love (at least understand) their products/services/business model.
2. Founders must have previous success stories before starting this new startup. They must be passionate about it. Follow on Twitter or any other social media to find out!
3. You should also look at the valuation of these companies from the earlier round of investment to see how much it has gone up in value. Usually, 50%–70%+ Year on year growth is very good enough for the last few years.
4. Check out the core team members on LinkedIn who builds the products and evaluate if they are passionate enough?
5. You should also check their Road maps and plans to grow users of the services/products/applications and also their competitors & their potential to dethrone it, if possible.
6. You can ask them difficult questions on CrowdCube’s forums before the start of funding.
7. Are they hungry for growth and have got 3–5 year solid roadmap?
8. One more hot indicator for potentially good start-up companies is % of funds filling up and the speed of funding. Few companies in my portfolio finished 800% funding in a few hours rather than 30 days!
Points to Remember before you decide to invest…
1. You might not be able to sell your shares on the public trading platform for a few years.
2. You have to wait for 5–10 years for exit investment on start-up companies.
3. Most Startup companies do not do well and you are likely to lose all money! You can mitigate it via carefully reviewing companies on their website before any investment!
4. Do not invest all your money into just a few Startup companies. You must have at least 10–15 Startup companies. If they do well, you can invest further into rounds!
Finally, time to show my cards (Investments).
My Crowdcube Portfolio.
Following are my lovely/sexy companies which I love what they are doing for humans. Except for Coconut Software, I use all other companies’ products on daily basis.
Klarna: Buy what you need today and pay later
Free Trade: Buy Partial Stocks without transaction fees.
Emma: Personal finance and budgeting tool that saves money!
Coconut: Accounting software for those who work for themselves!
Curve: PayPal of Payment Cards with cashback, more!
Moneybox: Easiest way to start saving.
Thanks for reading it. I appreciate your time and hopefully, I have contributed a little great to your life today.
Currently, CrowdCube is hosting a Fintech Project you might want to review apart from other interesting projects!
Please feel free to comment! I would love to add more enrichment to your life via my article. Do follow me!
Do Your Own Research: The information presented here is intended to be used for informational purposes only. Users must take independent financial advice from a professional. Independently research and verify the project before deciding to do any kind of investing.
No Investment Advice: Articles presented here is being based on personal opinion and experience and must not be considered professional financial investment advice at all.
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