Ironically, more traditional venture capital firms like ours, which only allow investments from accredited investors and, even though accessible online, set a higher minimum investment requirement (our new firm VCapital has a minimum individual investment requirement of $25,000), welcome these new (online crowdfunding) firms that are democratizing the industry. Frankly, they are so new relative to the typical lead time from investment to return that it’s too soon to say how well they will do for investors. More on that later. Nevertheless, for us, the ability of a venture to attract a large number of these firms’ smaller investors represents valuable market intelligence, demonstrating early concept appeal. It’s somewhat like virtual market research. If the venture goes on to show progress and has greater subsequent funding needs for expansion, we may be more likely to invest. We may not get in quite as early, but the risk when we do get in (which will likely still be early in the venture’s growth) will probably be less too . . . an acceptable tradeoff.
. . . Putting all this together, it looks like we are actually just now entering the golden age of venture capital for individual investors and the entrepreneurs whose dreams they will be able to fund and then benefit from financially. This book is written for both groups – individual investors and entrepreneurs – to help guide them along the path to potential wealth.
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