Up until recently, when you broached the topic of private investing, this concept was exclusively in the realm of the affluent. However, a new regulation – specifically, Title III of the JOBS Act, otherwise known as Regulation Crowdfunding – opened this exciting arena to the public. Now, virtually anyone can participate in equity crowdfunding opportunities.
The process is similar to buying shares of publicly traded companies. For a minimum investment (which varies from offer to offer), investors have a chance to acquire equity in startups. Theoretically, this gives these early-bird buyers a leg up from everyone else. By participating in the early vision of an organization, they stand to benefit the most if the target firm launches an initial public offering.
However, therein lies the ultimate risk of equity crowdfunding: no one can guarantee that the target firm will go public. Sadly, the stark reality is that 90% of startups fail. Therefore, investors should be extremely cautious about whatever venture they decide to capitalize. Yes, the allure of getting on the ground floor of the next Amazon (NASDAQ:AMZN) or Apple (NASDAQ:AAPL) intrigues.
But you could just as easily pick a clunker like Tucker.
Therefore, you cannot afford to ignore the often wild risks associated with private investing. That said, crowdfunding will likely always have its allure. For one thing, the upside of making it big is too tempting for many to pass up. Just as importantly, there are innovative, groundbreaking businesses that you’ll have difficulty finding in traditional markets, if at all.
Finally, bear in mind that not all crowdfunding or private investing offers are the same. For instance, real estate crowdfunding could involve equity ownership in a management company or stakes in cash-flow generating properties. Further, blockchain-based security token offerings have changed the game in a very short time.
Let’s take a look at some of the most compelling ideas that you can find in the world of private investing.
As you’re all too aware, the novel coronavirus knocked the wind out of commercial aviation. Not surprisingly, very few people want to be stuck in a flying tube with hundreds of other strangers. Sure, screening data from the Transportation Security Administration reflects rising air passenger volume from the April doldrums.
But at roughly 30% capacity from the year-ago level, it’s clear that fear lingers amid airliners. Nevertheless, I’m intrigued by private aviation platform Jet Token. Indeed, because of the coronavirus, Jet Token could be the most surprising idea among equity crowdfunding opportunities.
Essentially, Jet Token streamlines private jet membership by allowing members to combine commercial and private travel on one itinerary, among other benefits. With a massive pandemic, the affluent who must travel now have a better, cheaper option. As well, Jet Token can open up executive travel during this challenging time.
Jet Token is offered on the StartEngine crowdfunding platform with a minimum investment of $99.
For many folks, the underlying product of Spero CBD needs no introduction. If you do, you’ll at least know that cannabis has always been problematic because of the compound tetrahydrocannabinol, or THC. Due to its psychoactive nature, cannabis was a no-no. However, the Agriculture Improvement Act of 2018 legalized cannabidiol (CBD) at the federal level, which is basically cannabis without THC.
Technically, the latter half of the last sentence may or may not be true. Many competitors in the CBD space utilize a harsh chemical process to remove THC from the cannabis plant. This process could still result in a trace (but legally acceptable) amount of THC being inside a CBD product.
However, Spero CBD changes this dynamic by incorporating a process called liquid chromatography. This is a far gentler mechanism which removes THC but keeps other helpful, non-psychoactive compounds (or cannabinoids) and terpenes (essential oils) within the final product. Therefore, Spero CBD features unparalleled quality.
If you’re interested, Spero CBD offers a convertible note with an 8% interest rate and a maturity date of May 1, 2021.
Source: Goran Bogicevic / Shutterstock.com
Despite the ever-expanding waistline of America, the athletic apparel and lifestyle industry has never been stronger. Yes, the contradiction is glaring. However, the profitability metrics for investors don’t lie. Just take a look at publicly traded behemoths like Nike (NYSE:NKE) or Lululemon Athletica (NASDAQ:LULU). Even though a pandemic should be decimating discretionary retail demand, shares of these two companies are soaring.
And that’s why those interested in private investing should take a look at Hylete. A fast-growing fitness lifestyle brand, Hylete offers high-quality fitness apparel and gear. In addition, the company enjoys a robust base of loyal consumers and supporters, many who hail from military and first responder backgrounds.
While you might think that the athletic apparel market is too crowded, consider this: people who exercise regularly also make more money than those who don’t. With Hylete, the company is marketing to a hungry and willing audience.
To get started, Hylete has an equity crowdfunding offering with a minimum investment of $500.
One of the most powerful contributions that crowdfunding platforms can make is to democratize real estate investing. What I like about real estate is that it’s the king of all investments. With it, you can create true wealth as well as sizable cash flow. However, it has become increasingly difficult to attain, especially for younger generations.
Certainly, the novel coronavirus pandemic and the resultant economic pressure isn’t doing this situation any favors. And if regular folks want to invest in commercial real estate? Forget it! Yet that’s the bold vision behind Jamestown Invest. By pooling money together, Jamestown can invest in viable properties, generating income. Later, those properties can be sold, with the goal of making money for investors.
As well, this particular real estate category can help diversify your private investing portfolio. Also, don’t let the pandemic fool you: many people are still out and about buying stuff. When the virus finally fades away, you may even see pent-up demand boost commercial real estate valuations.
To have your shot at becoming a mini-real estate tycoon, you can buy Jamestown Invest stock at $10 per share, with a minimum investment of $2,500.
For those who are interested in highly lucrative real estate with strong cash-flow potential, you should take a look at ArborCrowd. Thanks to a vast network of relationships built over a 30-year period under the Arbor corporate umbrella, ArborCrowd is able to provide proprietary deals to prospective investors. The bulk of their past deals involve multifamily buildings in high-demand real estate markets.
Unfortunately, unlike other private investing opportunities on this list, ArborCrowd is limited to accredited investors. However, what you get for your money is a thorough vetting process that eliminates properties that don’t meet the firm’s rigorous standards. Therefore, when you stake your capital on ArborCrowd, you have the assurance that you’re only dealing with the best.
Essentially, ArborCrowd becomes your asset manager, providing you regular updates along with cash disbursements when available. To get started, head on over to its website where you can apply for approval into the network.
Source: Wright Studio / Shutterstock.com
Through the power of security token offerings (STOs), investors can realize the full potential of the blockchain. Unlike initial coin offerings (ICOs) whose main value stems from the speculative value of the issued virtual currency, STOs represent ownership in assets, such as real estate or equity in a company.
Among the most compelling STOs are those levered to the burgeoning fintech industry. Here, Fvndit is a fintech firm focused on capital funding solutions for small to medium enterprises (SMEs) in Vietnam. Why Vietnam, you might ask? This emerging market offers viable opportunities that’s been years in the making. Primarily, Vietnam could be the next big outsourcing hub, and not just for manufacturing jobs.
With the proliferation of technology, a new generation of tech innovators and professional talent is rising in the country. By investing in Fvndit, you can directly feed this rapidly accelerating market, potentially skyrocketing your portfolio.
Currently, Fvndit is in “TBA” status regarding its intended token offering. Still, this is one to watch closely.
As one of the pioneers in cryotherapy chambers and localized cryotherapy, Finland-based Cryotech Nordic has been generating strong international buzz. At first, I must admit that when I read about cryotherapy chambers, I thought it was referring to freezing our bodies so that people may be resuscitated in the future. However, that’s not exactly what’s going on here.
Instead, Cryotech Nordic is all about improving your quality of life in the here and now. First, with whole body cryotherapy, you submit your body to subzero temperatures. From what the company states – I’m not necessarily in a hurry to try it out myself – cryotherapy chambers promote health optimization and faster recovery from sports-related stress.
The same principle applies for localized cryotherapy. But instead of submerging your entire body, you can apply subzero treatment to specific parts. Hence, it’s a try before you buy concept.
Similar to Fvndit, Cryotech is an STO that is currently in TBA status. But this concept is so novel, perhaps revolutionary, that it deserves your consideration.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. As of this writing, he did not hold a position in any of the aforementioned securities.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.