Micro Investing | A Quick Guide to Crowdfunding

Have you always wanted to try being a venture capitalist but couldn’t afford its high risks? Do you also want to feel useful, knowing that part of your capital is acting as a catalyst for social good? Then micro investing might be just for you! Almost non-existent just a few years ago and admittedly still in its introductory stage, this form of investing has been growing rapidly in recent years and may be worth a look.

As with any new and rapidly developing investment model, micro investing is relatively vague and not easy to define. However, it is often associated with the concept of crowdfunding.

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Made widely known to the public through the 2012 legislative debate over the JOBS Act (JOBS is an acronym for Jumpstart Our Business Startups), crowdfunding is the practice of funding an idea or project by raising many small amounts of money from a large number of people.1 This is typically done via the Internet and can be used to support a wide variety of projects. Crowdfunding websites such as Kickstarter, Indiegogo, RocketHub and others provide potential investors with thousands of ideas they might connect with and in which they can make small investments.

Just browsing through the different projects can be a lot of fun. Crowdfunding websites typically focus on raising funds for creative projects and list them generally by category, which can range from Art and Dance to Publishing and Technology. But if helping just one individual or a small group of people isn’t enough, other crowdfunding websites, such as MicroPlace, may offer something different. This PayPal affiliate advertises itself as “a brokerage platform where US individuals can invest in companies creating positive social impact in the US and abroad and earn a financial return”.2 All projects on MicroPlace fall under the category of impact investing and are focused on developing communities, supporting women, providing affordable housing, etc. At the time of publication of this article, the minimum acceptable investment is $20. However, if one is really serious about his venture capital aspirations, MicroVentures, which connects angel investors willing to commit anywhere between $1,000 and $50,000 and startups, might be the right choice. And while returns might never match those of an actual venture capitalist, risks are also much lower. After all, the key word is “micro.”

 

Hewins Financial Advisors, LLC d/b/a Wipfli Hewins Investment Advisors, LLC (“Hewins”) is an investment advisor registered with the U.S. Securities and Exchange Commission (SEC) under the Investment Advisers Act of 1940. Hewins is a proud affiliate of Wipfli LLP. Information pertaining to Hewins’ advisory operations, services and fees is set forth in Hewins’ current Form ADV Part 2A brochure, copies of which are available upon request at no cost or at www.adviserinfo.sec.gov. The views expressed by the author are the author’s alone and do not necessarily represent the views of Hewins or its affiliates. The information contained in any third-party resource cited herein is not owned or controlled by Hewins, and Hewins does not guarantee the accuracy or reliability of any information that may be found in such resources. Links to any third-party resource are provided as a courtesy for reference only and are not intended to be, and do not act as, an endorsement by Hewins of the third party or any of its content or use of its content. The standard information provided in this blog is for general purposes only and should not be construed as, or used as a substitute for, financial, investment or other professional advice. If you have questions regarding your financial situation, you should consult your financial planner, investment advisor, attorney or other professional. Hewins does not provide tax, accounting or legal services.
OneBite Editorial Staff
OneBite Editorial Staff

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Micro Investing | A Quick Guide to Crowdfunding

time to read: 2 min