There are different ways of investments; different ways of making money and now a day’s thanks to the internet you can make money very easily.
Just by making use of a software setup (Swggr) you can make money; By posting restorative images your friend and also of yourself and getting loads of likes can get you shopping rewards and for this you have to make a minimum investment is US$10,000.
Where can you find such relatively unknown and new subcategory of financial services? The answer is Crowd Investment.
Now you would want to know what Crowd investment is? Crowd investing is the exchanges that are made online to generate monetary support. Here you are rewarded with products, and if you are lucky, enough you would get some money in return as well.
One such Act was passed in U.S in the year 2012 (Jumpstart Our Business Startups (JOBS) Act) through which the governed in encouraging the investors to do Crowd investment. Here the companies solicit and advertise funds directly from the public.
Earlier only people who made investments in millions were allowed to do such investments but thanks to this act and to the Securities and Exchange Commission, who relaxed the restriction, now common people can also make investments.
To this relaxation of restriction in the matter of crowd funding President Obama had commented that “ordinary Americans for the first time will be able to go online and invest in entrepreneurs that they have faith in.”
Earlier the people with the help of a private company were making such investments but as there were no assured returns, so the Investors entered the market at their risk, for his they rely on their contacts with the businessman and also on the guidance engines.
Important information that you would be amazed to now is that 70 % of crowd investing serves involve equity arrangements. The investment that is mad may survive 5 to 8 years and sometimes can also make to its 10th anniversary. But there is chance that the investment that you have made assures no returns.
As mentioned earlier that you might not be rewarded for you investment. So we can say that Crowd investing offers both opportunity and challenge to conventional banking.
Recently an interview was conducted with Kevin Grieve, a noted management consultant, who said that if Americans transferred just 1 % of their capital in investment and savings accounts into backing small businesses, the overall would equal nearly 10 times the venture capital.
Few firms are already exploring the field. Few examples are Australia’s Westpac Banking’s, Santander UK and Funding Circle. As U.K comes second in Crowd investment, the government has made it mandatory for the banks to direct small business customers.
People don’t opt for the option of loans; they are not much regular. According to the findings some amount can be exchanged for equity that include 20 % are convertible loans, and 9 % are straightforward debt.
These crowding loans can even be set up in such a way that instead of a lump sum in return they can get revenue until they have received all their money.
According to the statistics, crowd investing is already a great success; it has fostered $ 600 Millions in investments since the end of 2013. The highest crowd investing platforms in the U.S are 350, in the U.K. 90, in France 50, and 30 each in Canada, Spain, Germany, and Netherlands.
Investment can even be done through lending sites, online brokerages, and mobile payments processors. Thanks to the new technology such as apps, social media and e-commerce.
Crowd investment is a new concept in the market but the investments done in it would assure economic growth in long run.