how you can invest in startups w/o being bougie

I invest in startups. But here’s the catch:

I am not an accredited investor. An accredited investor according to the SEC is someone who meets the one or more of the following criteria:

“Individuals (i.e., natural persons) may qualify as accredited investors based on wealth and income thresholds, as well as other measures of financial sophistication.

Financial Criteria

• Net worth over $1 million, excluding primary residence (individually or with spouse or partner)

• Income over $200,000 (individually) or $300,000 (with spouse or partner) in each of the prior two years, and reasonably expects the same for the current year

Professional Criteria

• Investment professionals in good standing holding the general securities representative license (Series 7), the investment adviser representative license (Series 65), or the private securities offerings representative license (Series 82)

• Directors, executive officers, or general partners (GP) of the company selling the securities (or of a GP of that company)

• Any “family client” of a “family office” that qualifies as an accredited investor

• For investments in a private fund, “knowledgeable employees” of the fund”

So you must be wondering “AATISH how on earth do I invest in startups???”

Technology innovation has allowed us to make big strides in financial technology and that includes investing in startups.

Equity crowdfunding is when a startup or an early-stage company is looking to raise a certain amount of financing in exchange for equity. How much an investor puts is proportional to how much they would receive.

Let’s bring in our thinking expert ‘ The Thinker’ to break this down:

Say Company A is looking to raise $500,000 and each share is worth $10.

Thus company A is offering 50,000 shares for $500,000.

And you invest $1,000 into Company A.

You would get $1000/10 = 100 shares.

Whereas your buddy Louis (the trust fund baby) invests $50,000.

Louis would get $50,000/10 entitling him to 5000 shares.

If you are based in the United States; platforms like Seedrs, WeFunder, StartEngine are fantastic platforms to get you started.

Whereas in the United Kingdom; platforms like Crowdcube ( which I personally use for European Investments) are equally good alternatives.

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