Crowdfunding
Pooled investments in startups, property and projects at low minimums.
"Crowdfunding" describes the distribution method, not one investment
Crowdfunding platforms can offer very different securities: startup equity, SAFEs, real-estate interests, debt, revenue-sharing agreements or fund interests.
The fact that each can be purchased through an online platform does not make the investments economically similar.
The issuer and security structure matter more than the crowdfunding label.
What to inspect before investing
Identify what the investor actually owns, who controls the underlying business or property, how the investment can generate a return and whether an exit mechanism exists.
Minimum investments can be low while risk remains high. Small-dollar access makes diversification easier, but it does not change the possibility of business failure, dilution, delayed projects or an investment that cannot be resold.
Common mistakes
- ×Treating Regulation Crowdfunding limits as a measure of deal safety
- ×Skipping the Form C offering document and issuer financials
- ×Assuming every platform applies the same diligence standard
- ×Concentrating in a single deal because the minimum is small