Why become an investor on Microventures? by Bill Clark | Tuesday, September 7, 2010
One of the main reasons I created this platform was because I wanted visibility to private placement deals, but there was no place for me to gain access. If you are not in the angel investing community and don’t have $50,000 to invest in a start-up, you probably won’t have access to a lot of deals. I created this platform to level the playing field and let “Bill” from Austin who is not in the VC community have access to companies that are actively seeking capital. So now not only can you see private equity deals on the site but you don’t have to invest $50,000 to get in on the deal. You can invest $250 and diversify. Fred Wilson from Union Square Ventures recently wrote the following on his blog:
“A company without a product in the market is a very risky proposition. Some VC firms will invest at this stage but I am not sure it’s entirely appropriate for VCs to invest at this stage. Our firm will do it when we are backing a serial entrepreneur with a super strong track record that we are very familiar with. Otherwise, we stand on the sidelines and watch with interest but no capital at risk. A syndicate of angels, each with a small amount of capital at risk in the project, is a much more appropriate source of capital for a company at this stage because the risk has been well syndicated among the group.”
This is why our platform is great. An investment in a private placement has a high degree of risk is very risky so you don’t want to put all your money in one deal. If you have $5,000 to invest you can spread around your risk and invest $500 in 10 investments to diversify.
Another reason why you should consider our site is because we do up front due diligence on each business listed on our site. We review them for fraud, financial stability, use of funds, executive team backgrounds, etc. You should still do your own analysis to assess your personal risk based off the details of the Private Placement Memo that is listed on the company but we do the first screening for you.