“So, a professional poker player, a kombucha maker, and an allergist head into an online chat room…”
Wait a second… is this a joke? Something along the lines of "A priest, a minister, and a rabbi walk into a bar”?
Not at all. It’s a real-world story. I just read about it in The New York Times.
And it’s a wake-up call about one of today’s biggest investment trends.
Are you already in on it? If not, it’s time to get up to speed!
The Investment Trend of our Generation
What’s this trend I’m referring to?
Regular people are investing in startups.
As The Times reported earlier this month, ordinary people including kombucha makers, dentists, and retirees are becoming “angel investors” at an astonishing rate.
They’re meeting up online to get educated, and then they’re investing billions of dollars into early-stage startup companies.
In the first half of this year alone, they invested $2.1 billion.
Let me tell you what’s going on here…
It All Starts with the Returns
For starters, with stocks at all-time highs, and interest rates at historic lows, investors are looking for alternatives.
And from an investment perspective, startups provide an excellent alternative:
According to Cambridge Associates (an investment firm with clients like Bill Gates and the Rockefeller Foundation), over the last 25 years, early-stage startups have generated average annual returns of 55% per year.
That’s about 10x higher than the average returns of the public stock market!
But as The Times reported earlier this month, several other factors are also coming together to make this a big trend…
Transforming the Venture Capital Industry
For example:
- For nearly 100 years, startup investing was legally off-limits to anyone who wasn’t already wealthy. It was an elite club with a velvet rope. But the SEC finally loosened those restrictions. So now anyone can get involved.
- For startups, raising funds from “mom and pop” investors has never been easier: new internet-based services make it simple and affordable.
- Furthermore, as startups have woken up to the marketing power of angels — after all, these angels often post about their investments on Twitter or Facebook — they’ve become even more eager to welcome them as investors.
Add it all up — and as The Times reported, these new angels “have the potential to transform a venture capital industry that has been stubbornly clubby.”
Who Are These Ordinary People?
You might be surprised to learn that these angels are very similar to you.
For example, an angel named Mrs. Advani is a retired schoolteacher living in Australia. Over the last few years, she’s invested in 41 startups.
And 35-year-old Ashley Flucas is a real estate lawyer in Florida. She began investing in startups about three years ago, and now has a portfolio of more than 200 companies.
Why did Ashley jump into startup investing?
As The Times reported, it’s because it offers her “a chance to create generational wealth…”
But Beware of the Risks
But there’s a reason that new angels are meeting up online to educate themselves:
Investing in startups is entirely different than investing in stocks or bonds.
And if you don’t know what you’re doing, you could get hurt.
For example, as The Times reported, an entrepreneur named Aaron Houghton lost his investment when he got involved in a friend’s startup. And he lost all his investment again in a second startup.
But Houghton called these losses a “wake-up call” — the jolt he needed so he finally recognized that he “needed to spend more than a few hours researching companies before investing.”
We couldn’t agree more:
To succeed in this market, you need a system that can help you identify the potential “winners” and avoid the “losers” — and then you need to do your research.
That’s how you can get access to those 55% annual returns.
A Solution for Everyone
Ready to start investing in startups yourself?
If so, you have two options:
First, you could do it yourself — just be sure to use a proven system, and put in the time to do the research.
Or second, let us do it for you.
If you’d like to learn more about our services, give my colleague Lauren a call, toll-free, at 1-844-311-3191.
Happy Investing.
Best Regards,
Founder
Crowdability.com
