Some people have well diversified investment portfolios, and they now look for different ways to invest in small businesses to add even more variety. These investors find that it is easier than ever before to find quality opportunities, conduct investments and collect dividends largely because of the widespread use of the internet. A few years ago business and non-profit organizations used a technique called crowdfunding to raise capital for their projects through donations made over the Internet. Today, the crowdfunding model has been extended to include investment crowdfunding. This type of funding allows investors to gain shares in a given business and eventually earn dividends as the business grows. Small business investors can choose investment crowdfunding sites that specialize in supporting local organizations, international businesses, creative arts based entrepreneurs and alternative energy projects. Here are some popular sites that help to match investors with small business investment opportunities.
Village Power
Village Power is an investment crowdfunding platform that allows qualified investors with opportunities to support renewable energy projects. The latest alternative energy innovation may not come from the leading energy companies; Village Power shows investors who are interested in this exciting sector that many new ideas come from the minds of people who operate small businesses. Ideally, the funding of Village Power projects turns out to be a winning proposition for investors, green entrepreneurs and the communities that eventually benefit from environmentally friendly energy initiatives. Securities Exchange Commission (SEC) rules that are designed to protect consumers against investment fraud dictate that Village Power do business with primarily accredited investors and a limited number of non accredited investors. Accredited investors have higher visibility into projects from the start, but non accredited investors must receive an invite to review details about projects that are of interest to them. Both types of investors are required to make minimum investments of $1,000 to support Village Power projects.
Crowdfunder
In contrast to the highly specialized Village Power venture capitalist network, the U.S. based Crowdfunder organization brings all types of projects to the attention of qualified investors. Technology, financial services and environmentally friendly products provide the focus of many of their projects. Crowdfunder specializes in making leading edge innovations available to investors who want to fund projects at the ground floor rather than as a public offering. This is nearly impossible to do without inside connections; Crowdfunder wants to be that connection for the average investor. However, only accredited investors are allowed to invest with Crowdfunder currently because of the SEC rules that apply to its business model. These individual investors must verify income in excess of $200,000 to qualify as accredited investors. Crowdfunder plans to expand its offerings to non accredited investors upon the adoption of additional SEC legislation that is forthcoming.
Funding Circle
The Funding Circle is an example of a successful investment crowdfunding platform that features local business opportunities for interested investors. The main attraction of this United Kingdom based company is that investors can support businesses in their local neighborhoods and see the results of their investments up close. Funding Circle screens small businesses and makes qualified projects available to investors on its turnkey, online investment platform. Many investors are invited to meet entrepreneurs in person and take tours of business facilities as the companies grow.
Related Resource: Venture Capitalism
Conclusion
Not all small businesses are headed for superstardom. So even though there are many different ways to invest in small businesses, sophisticated investors who want to become avid venture capitalists for small businesses should conduct the same amount of research as a seasoned financial analyst.
