Pros, cons and who should create an account
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Is MicroVentures right for you?
Founded in 2009, MicroVentures is a crowdfunding platform providing investment opportunities to accredited and non-accredited investors (Accredited investors are individuals with a net worth of at least $ 1 million or annual income greater than $ 200,000), institutional investors and startups.
The investment platform is among the ranks of other popular companies (eg, SeedInvest and Republic) that have made venture capital investing – or start-up investing – accessible to the public.
You can buy shares from a crowdfunding offering with as little as $ 100, but other investment announcements may require more.
Not sure if MicroVentures is right for you? Read on to see how it compares to other platforms.
How? ‘Or’ What Micro-enterprises compare?
MicroVentures, Wefunder and SeedInvest all connect startups to fundraising opportunities and investors to emerging private companies. However, platforms vary when it comes to investment minimums, fees, features, and investment listings.
The difference between SeedInvest and the other two is that SeedInvest provides an automated start-up investment. This feature has a minimum requirement of $ 1,000, but it diversifies your portfolio with startups that meet your preferences.
But MicroVentures beats both when it comes to fees. It does not charge any fees for unaccredited investors who participate in crowdfunding offers, but you will need to pay at least 2% at Wefunder and SeedInvest.
Ways to invest with MicroVentures
MicroVentures is available to anyone, but its investment offerings vary for accredited, non-accredited and institutional investors. It offers three options:
- Accredited investment: If you are an accredited investor, the platform gives you access to early and late stage private market investments. Although its crowdfunding listings are publicly available, you will need to create an account to see its accredited opportunities.
- Crowdfunding in equity: This investment option is available to all investors, and it includes a wide range of start-up investments (most with a minimum requirement of $ 100) that MicroVentures has reviewed and performed due diligence. You can see both his active opportunities and his previously funded campaigns here.
- Secondary trade: MicroVentures also offers late stage private equity buying and selling opportunities. Late-stage private actions represent secondary actions of private companies that have gone beyond the early stages of fundraising and have remained private for an extended period of time. Accredited and institutional investors can buy shares of these companies, but you will need at least $ 50,000 to get started.
If you are wondering how much this costs, unaccredited investors will not have to pay a fee for the Regulation CF or Regulation A offers. However, there are several fees that may apply to qualified investors who purchase Settlement D ( private investment funds). These include a one-time investment fee of 5% and an offering fee of 1.5%, a management fee of 0.50% and a deferred interest charge of 10%.
There are also several fundraising options for startups or small businesses. MicroVentures specifically assists businesses looking to raise between $ 150,000 and $ 1 million, and offers support through Settlement Crowdfunding, Settlement A and Settlement D.
When it comes to fees, the amount you pay will vary depending on your type of fundraising campaign and how much you want to raise. However, you can generally expect the following:
- The initial costs: You will need to pay $ 1,000 for a legal review and $ 1,500 for Form C (this form is an offering statement that startups file when they need to raise funds for expansion). If you want to raise more than $ 107,000, you will also need to pay between $ 3,000 and $ 5,000 for an external financial review. Finally, you can pay anywhere from $ 100 to $ 1,000 if your business is in a condition that requires notice to be filed. These fees also apply if you sell at least 50% of your securities in that state.
- Closing costs: These include a 5% commission, a 2% participation fee, and an escrow fee of $ 1,000 or 0.35% (whichever is greater).
- Optional fees: You can also pay for external marketing and video production, but these fees may vary.
Regarding eligibility, MicroVentures says it is looking for companies with a unique idea or an innovative approach to old technology. It also reviews the company’s team, traction, market size, and other factors. Once you have applied, it may take six weeks to receive final approval and a funding date. The investment platform indicates that you can receive funding within two weeks of the end of the fundraiser.
Educational and investment resources
When it comes to educational resources, MicroVentures primarily offers blog posts that delve into the details of its investment products. The platform also has a glossary containing more than 30 articles on terms such as âapproved investorâ and âpreferred sharesâ.
As you’ve probably guessed by now, investing in startups requires significant research. MicroVentures facilitates this process by providing information on countless companies. With these resources, you can stay up to date on company news, team management, investors, and more.
East Micro-enterprises reliable?
Personal Finance Insider assesses the reliability of the business by examining the Better Business Bureau profile of each investment platform. BBB ratings range from A + to F, and MicroVentures currently has a B- rating.
When researching businesses, the office examines the history of customer complaints, licensing and government actions, advertising issues, business practices, and other factors. He indicates that MicroVentures’ rating stems from the failure of the investment platform to respond to a complaint filed against them.
MicroVentures has closed two complaints in the past three years and no complaints in the past 12 months.