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4 Tips to Invest in Equity Crowdfunding Like a Pro

You’re probably familiar with the concept of crowdfunding through platforms like GoFundMe and Kickstarter… Maybe you’ve even donated to a worthy…



You’re probably familiar with the concept of crowdfunding through platforms like GoFundMe and Kickstarter…

Maybe you’ve even donated to a worthy cause… your friend’s pet project… or a new product you believed in (or maybe you just wanted the free swag that came with coughing up some cash).

But crowdfunding has become so much more… These days, equity crowdfunding allows you to claim a stake (or future stake) in your favorite private business—without being an accredited investor.

And it benefits small businesses, too, which no longer have to jump through the traditional financing hoops to secure the necessary capital to grow their company.

But that doesn’t mean you should invest in just any business on a crowdfunding site for the sake of an equity stake.

It’s important to know you’re investing in the right companies that are set up for success.

Here are some tips for investing in equity crowdfunding like a pro…

  1. Look for business plans that solve an unmet need

The best businesses start with a problem… and a solution. Maybe it’s a global problem… or maybe it’s a problem felt be a specific customer niche. A business could have a great operational strategy—but if it’s not solving an unmet need, it won’t succeed.

Take some of the most well-known companies. Uber, for instance, solved the problem of hailing a cab from anywhere at any time. Facebook solved the problem of being able to stay connected to long-lost friends. Robinhood solved the problem of accessibility to the stock market for young, first-time investors. Square solved the problem of small businesses being able to accept credit card payments.

All of these are now multibillion-dollar companies. 

But identifying a problem is one thing… finding the solution is another.

For any company you’re considering investing in, make sure you review the business plan carefully. You want to make sure that you fully understand how the business plans to solve the need it’s trying to meet. Make sure it’s not inventing a non-existent issue… or reinventing the wheel that another company has already successfully implemented. And make sure you understand how the solution works… and that the company is capable of executing its vision. Don’t get caught up in grandiose promises and science you don’t understand—inform yourself on the intricacies of how the solution works… and that it’s actually feasible. (Looking at you, Theranos.)

  1. Get to know the people running the business

That doesn’t mean you have to meet and greet every executive on the board. But you should thoroughly research each and every member of the team to make sure they have the necessary know-how. 

A lot of brand-new entrepreneurs might have a great idea… but no business experience or savvy. These people in particular are susceptible to surrounding themselves with unknowledgeable or even dubious characters to help them run their companies (again, looking at you, Elizabeth Holmes).

Do your due diligence. Check Google and LinkedIn pages. Look for red flags like no prior experience… failed startups… bankruptcies… investigations into business conduct… and disciplinary actions taken against them.

The best startup teams are comprised of folks who have years (better yet, decades) of successfully running a company before within the industry. Better yet, they’ve built a business before and have even been able to sell it to a larger competitor. They understand how the industry works… how a business functions… how to lead a team… and how to execute on—and scale—a vision.

Also, know who else is investing in the business. If it’s attracting smart, experienced venture capitalists who make it their business to find the best companies… chances are good they’ve conducted their own thorough research—and are happy with what they see.

  1. Know where the money is going

Early-stage companies typically don’t have much revenue—so it’s important they’re using their money wisely.

It may be hard to dig up financials on private firms, but any company you’re considering investing should be willing to be transparent with this information.

Again, thoroughly review the business plan and investor relations information (this should be posted somewhere it’s easy to find). If there’s a detailed white paper for investors, all the better.

The money should be going towards hiring top talent… product research and development… and strong marketing and sales initiatives.

  1. Feel comfortable with what you’re getting

Is the management planning to IPO or sell eventually—and what kind of payout will you receive? Are you entitled to voting rights on any business decisions as an investor? Will the company pay dividends? Are there any other investor perks?

These are all questions you should be able to answer when you invest through crowdfunding in a company. Whatever the benefits are, make sure you’re comfortable with them.

One Crowdfunding Idea for You Today

Nucleus—a full-scale psychedelics ecosystem—is currently accepting investors through crowdfunding… and it meets all the criteria for an excellent investment mentioned above.

It’s solving a major problem in healthcare right now by supporting psychedelic medicines scientifically shown to help treat a variety of mental health conditions, from addiction to depression to PTSD to OCD, and much more.

With a sales pipeline of more than 200 psychedelics companies… some 50,000 followers (and 100,000 page views per month)… a network of 3,000 care practitioners… and eight brands (and counting), Nucleus is well-positioned for the imminent adoption of psychedelic therapy. And its budget is going towards further developing all of these components.

The business was created and is being run by serial entrepreneurs with a history of successfully scaling and selling startup companies. The Co-Founders, Dustin Robinson, and Robert Velarde are the Managing Partners of Iter Investments, a $20 million venture capital fund investing in the psychedelic industry. The CEO, Logan Lenz, has managed over a billion dollars in marketing spend and developed several healthcare technologies over the past decade. 

As Nucleus has continued to expand, the company has been backed by Iter Investments. But now it’s time to let everyone join in on this journey and contribute to the Nucleus mission to help millions of people connect with the psychedelics industry. 

You can invest as much as you’d like or little as $200—it’s up to you, depending on your comfort level.

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