In this article, we will be looking at how crowdfunding has changed the investment landscape from both the developers and investors point of view. Please note that this is in no way financial advice, this is simply an exploratory piece into how crowdfunding has developed the way ordinary people can invest.
The concept of crowdfunding and platforms in which people can come together to fund projects has made it considerably easier for both investors and innovators alike to potentially grow their investment portfolios further. With platforms such as LEOcrowdfunding, you are able to sign up, take an appropriateness test and begin your investment journey by investing your capital into projects you are interested in. The appropriateness test will also classify what type of investor you are, which will help to determine your risk appetite and suitability for projects.
For innovators, more traditional forms of seeking investment can take a long period of time and can sometimes not even get off the ground at all. Individuals can now set up their projects and using crowdfunding sites, potentially reach their target audience and get their projects funded with more ease.
With the use of crowdfunding opening up potential opportunities it is becoming more accessible for innovators. Investors are also benefiting as its opening up more opportunities for novice and experienced investors. This gives them access to deals which would normally be reserved for sophisticated investors that they may not have had otherwise. By being able to invest with as little as £100, crowdfunding has opened up the concept of investment to the masses.
With the Government requiring more new builds and the literal changing of the landscape, this means that investors can invest directly into property and join the developer on the journey to completion. This is potentially the case across other sectors within crowdfunding and the innovative way it connects investors to fundraisers means that there is a greater chance for diversity of investment and more options and opportunities for both parties.
Due to the nature of crowdfunding, it also offers the chance of crowd validation. Less experienced investors can have the benefit of more seasoned investors asking pertinent questions from the fundraiser about their project, which can potentially help them to determine their own suitability and interest in a project. Through the network, Investors can use the power of the crowd to broaden their portfolio and fundraisers can have a wider network of Investors without the need to find them through alternative methods.
Having a diversified and balanced portfolio is important and Investors should use the opportunity to conduct their own due diligence on the projects, Fundraiser and the platform itself when considering crowdfunding. Fortunately, crowdfunding is accessible to all, which affords the Investor the opportunity to spread their investments and experiment with as little as £100. Investments need no longer be exclusively for the wealthy, but for those who can afford to invest small sums that are affordable to lose as they investigate crowdfunding.
Here at LEOcrowdfunding, we have brought together an experienced team of experts, who are not only passionate about the crowdfunding sector but are seasoned professionals who have knowledge on the fundamentals of property and equity investment. We believe that having access to education about investment projects such as the ones on our site, will potentially lead to a generation of more knowledgeable investors.
As part of the investment journey, potential investors can learn about each project, how risk is addressed and attend webinars, read the Offer documents and interact along the way.
Many potential investment opportunities are held for seasoned or expert investors who already have a full, developed portfolio. Crowdfunding has eliminated the idea that investment is only for experienced investors and has welcomed novice investors into this new world.
Whilst it’s important to be inviting new investors, it’s also vital to educate them further on the concept of crowdfunding. Understanding their risk appetite, how much capital they realistically have to invest and how long their money could be tied up in a project are all crucial elements which will aid them in diversifying their portfolios further.
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