Please briefly answer the following background questions
Whatare angel investors, and angel investors clubs?
Angelinvestors are identified as the major source of investment andstartup capital of entrepreneurial in US[ CITATION Soh06 l 1033 ].Anangel investor also called as affluent person who provides capitalinvestment for a business, usually this is done with secure debt oron the ownership basis. A small group of people who deal in angelinvestment are also known as angel group/club that share research andincrease investment capital, and also offer advices to associativecompanies.
Crowdfundinggenerally comes in three categories which are equity- donating inbusiness for equal exchange, Donation- money invest in businessagainst non-defined rewards, and Debt – asking crowd for donationin exchange for the return in the same way via debt money.
Whatis the Jumpstart Our Business Startups Act (or JOBS) Act of 2012?
AJumpstart business ACT or JOBS act is a law made for the business ofsmall organizations by implying various security regulations. Thislaw was signed by the president of US on 2013 with bipartisansupport. The job act is among the most important parts ofcrowdfunding for communities which are starting up.
Whatis an accredited investor?
Accreditedinvestor is defined as security laws that defines investors permit oninvestments having higher risks. Investorstake decisions to invest startups on the basis of attributes of themanagement team, business opportunities and attributes ofentrepreneur[ CITATION Mel09 l 1033 ].Thereare various money factors including limited partnerships, funds,network of angel investors and more. Accredited investors term isapplied to highly investing organization like banks and charities.
Whatare the main provisions of the JOBS Act concerning angel andcrowdfunding investing?
Thereare various aspect of the Job act and some of the main point arelisted below.
Section4 title 3 of Jobs act offers crowdfunding securities. Section 4 inthe job act issue requirements from section 5 and explains about the1 million limit on security selling, and also addresses thatinvestment do not exceed limits that are defined in Job act.
Thesecond most important aspect of the job act is the section 3(h) thatis about exchange act which is about a mandatory portal where SECwill register as a broker. The process will go through examinationand also will be subjected to the national security association under15A of the Act.
Theintermediary will not offer advices or recommendation on thecrowdfunding, Security purchases and buy sell will be displayed onthe main portal, compensation and solicitation are also among theconsideration of job acts main provisions.
Crowd-funding (non-necessarily accredited investor)?
Thereare various companies to consider for crowdfunding among themfollowing will be in my consideration with explanation on them.
Fundrise: This Company offers direct invest and has fees up to 0-3%, which makes this company in our list. The investment that we will do in this company will be 1000$, the leaving the fee margin the total expected return will be 4% + 3% deduction.
Realty Mogul: Investment as little as $5000 so this makes it perfect choice in the company list. The online system of application makes it more suitable for easy medium. The investment in this company will be 2000 dollars, the expectation from this organization will be 5% excluding the fee that it takes. Including the fee, total expected income will be 8%.
RealtyShares: Investors have access to the information and this company has multi options as crowdfunding organization. The total investment on this organization will be 4000$ having expected income of 3%.
CrowdStreet: It connects with accredited investors are able professionally manger their investment making this company in the choice list. Total investment on this company will be 3000$ because of the higher security, the income statistics will be 8% total.
Collaperty: It has much simpler system where investor are able to invest not with the actual dollars which makes easier and consolidate with technology. The total investment in this company will be 2000$ and the expectation rate from this organization will be 4% on initial basis.
GroundBreaker: This Company is technology efficient where investors are able to manage network which is a positive option as compare to other companies. The investment on this organization will be 3000$ and the expectation that we are going to take is 6% of the total applied in this company. This company has good reputation which makes it perfect candidate for higher investment.
CrowdBaron: This Company has 4 percent fee margin making it the perfect choice, it also has options like newsletters and is spread across west. The total investment in this organization will be 2000$ making expected income 3% take back on initial basis.
iFunding: Investment starts from 1000 which makes it the excellent choice of selection. Total investment on this company will be 1000$ and the expected rate will be 4% of our total value, this company is perfect for startup because of the low investment ratio.
Prodigy Network: This Company is famous for its network and has good reputation which makes it perfect choice to invest in. The investment in this company will be 1000$ and the take back will be 5% of our value because of the reputation of the company.
Patch of Land: They have multi schemes like residential fix, equity purchases and more, which is the positive thing in a company. This company will be the in the selection list. This company will get 1000$ of our investment and the return value will be 3% of our total value.
Whatare the risks/opportunities in crowdfunding?
Thedownside of the crowdfunding is that with new opportunities there isa lot of risk, scam companies will try to counter money from locals.While SEC is protecting the rules with its policies but scam artistsare on work to create new recipes towards investors. Investment in astart-up company itself is the bigger side effect, there are guessthat can go wrong making things worse, there are some limits withsome companies but still investors can lose great sum in them.
Angel investing (accredited investor)
Therewere many selections to make but the most easily available source wasprefer while selecting companies. Invest in these companies will bebetween 10000$ to 100,000$, as a newly investor, the most appropriatemeasure will be to invest little and expect little. This will makethings easier. The return that we are going to set for thesecompanies will be between 5% – 20%, this will help in knowing thebusiness for further larger investment.
Tech Coast Angels (Southern California): This company is based on online entertainment and can prove to be best choice for short investment so investment in this company will be 10000$ and the return that we will expect will be 5%.
Houston Angel Network (Houston): Organization focuses in small investment making it the perfect choice for use to invest in, invest that we are going to make in this company will be 20000$ because of the return margin, the return that we will expect will be 10% of our total value.
New York Angels (New York City): This will be the choice in our list because of the popularity of the company, initial investment that we will expect from the organization will be 5% of our total value.
Alliance of Angels (Seattle): This company is operating since 1997 and invested million in different projects so we will invest 20,000$ in the company and the expectation will be 7% of our total value.
Golden Seeds: This organization focuses on women-led and also has recently started foreign language startup. This company is in the list and the expected margin by looking at the company will be 7% and investment 30,000$.
Whatare the risks/opportunities in angel investing?
Thereare various risk in angel investing and some of the particulars arementioned below:
Failure in venture of business
Difficulties in selling stakes
Takes time to show profit
It’s easy to get distracted
Look for sources of startups and list 10 startups you would consider working for, and perhaps apply for jobs as well?
Tenstartup business that we will prefer working with are as under:
Indiegogo: This organization runs on the reward base system, means owners and investors are able to order projects or donate like a gift instead of equity. This ability makes this organization perfect candidate for the startup.
RocketHub: This organization has various musicians, develops, scientists, directors, designers and many. This multi ability of this organization makes it perfect candidate to select. In this organization there are much chances of growing the startup business because of its various genres and investors.
Peerbackers: This Company takes 5% of the total money and it deals in various crowdfunding opportunities. For startup, this organization deals in proposals, where investors are able to look at the proposal and decide whether to further move with the process or reject. This proposal ability distinct it with other organization and startups can have better opportunity in there.
Kickstarter: This Company is globally active and their mission is to make life better. There are various funding available with this company, there field ranges from films, shows, journalism, food and more. These multi options and flexible online system make is the choice in our list of startup companies. With this company, there are chances that startups can have a job.
SoMoLend: This organization is technologic efficient allowing business to raise funds from customers, family and banks. The best thing about it is the transparent portal service that it offers, it is easier to use and is efficient, which makes it the perfect choice for startups who want to invest in it.
Endurance Lending Network: This organization is famous for its technological web platform, it provides funding on the basis of equity. Choosing this for the start was because it has defined capital investment and can be a great source for the startup. Any new setup can apply as long as they have good proposals to get enough attention.
Grow Venture Community: This organization is among the first transparent global platform for entrepreneurs. This organization also deals on the basis of equity, any startups can have enough funding opportunity for the job. The company is divided into parts where startups can have realize their ideas and secure enough funding from the investors.
MicroVentures: This company is based on equity services to companies having in their earlier stage. The company itself states that they are for the startups which makes it the choice of selection in our list. This company deals in broaker and takes portfolio for funding. These obvious factors makes this company in list of our choices.
Angel List: This organization is made for the starups, where startups are able to find work. The working principal is based on steps where investment is offered by raising funds. The company soon merged with a tech company which makes it the perfect web platform for newbies waiting to take jobs and completing them.
CircleUp: The based network of this company has base network at San Francisco and is connected to high investors. This company deals on the basis of equity making it the perfect choice of selection for starups who are able to invest on the basis of equity. This company has one of the most flexible website having all the required information for investors to look at and invest.
Whatare the risks/opportunities of working for those particular startups?
Thesebusiness are good but the most important factor that is the returnmakes these companies risky. These companies can be healthy to applybut as mention in the angel investment risk section that selling inthese real state companies will make things challenging and returnwill be longer so these factors makes these companies risk.
Briggman, Salvador. Top 10 Real Estate Crowdfunding Websites. dec 2014. <http://www.crowdcrux.com/top-real-estate-crowdfunding-websites/>.
S.Cardon, Melissa, Richard Sude and Cheryl Mitteness. “IMPACT OF PERCEIVED ENTREPRENEURIAL PASSION ON ANGEL INVESTING.” Frontiers of entrepreneur research 29.2 (2009).
Sohl, Jeffrey E. “Angel investing: Changing strategies during volatile Times.” Journal of Entrepreneurial Finance, JEF 11.2 (2006): 27-47.