Playbook #052: Equity Crowdfunding

🖼️ The Big Picture

Equity Crowdfunding is one of our most exciting opportunities, giving you the chance to participate as a partial owner of innovative startups with massive upsides for as little as $100.

That’s right, if you have $1,000 to invest, you could buy shares in 10 different startups on marketplaces like KingsCrowd.

It may not sound like a lot, but if you hit a winner like Coinbase, who raised $268,700 in 2012 through crowdfunding, then it could be really, really big.

How big? Well, we couldn’t find the valuation of the company during the crowdfunding campaign in 2012. But a year later, in 2013, they had a $22 million dollar valuation in a $5 million Series A round. Their market cap has recently been as high as $150 billion.

For easy math, let’s use the $5 million initial valuation and a $150 billion valuation today. That’s 30,000x, making a small $100 investment worth $3 million today.

If you want to play like the Sharks on Shark Tank but don’t have their massive checkbooks to back it, this is your chance. Where to start?

Well, besides using your Investor DNA, we're convinced it's smart to look at new companies capitalizing on disruptive innovation… the kind of innovation that could take a company from a $5 million dollar valuation to a $100 billion dollar valuation. Our research shows the following 5 areas could generate significant equity market returns over the next decade — and it's a good place to start:

• AI
• Battery Tech
• Blockchain
• Robotics
• Gene Sequencing

The challenge is picking winners. Coinbase had serious competition over these past 10 years, yet they rose to the top while others failed.

So, this is a portfolio game. Build a portfolio of companies knowing that many will fail, some will succeed and produce some degree of returns, and 1 in 100 will become a “unicorn” (valued at $1 billion or more).

If it sounds a bit like gambling, that’s because it kind of is. The good news is, the odds of striking it big with a unicorn are improving. And good research will improve your odds of winning.

There were more than double the normal number of unicorns born in 2021, and the probability of a startup becoming a unicorn has more than doubled since 2018 as valuations have risen.

There are tremendous opportunities to explore to fund the next unicorn — including stocks, venture capital funds, debt and equity crowdfunding platforms, or directly investing in a startup. But be aware that most startups fail, and research shows only 2.5% of venture-backed startups become unicorns.

🔢 By The Numbers

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CAPITALIZE is a tool for discovering new ways to grow your wealth. You get a new investment idea each week in a simple 7-Minute report. Quickly check to see if it matches your "Investor DNA" and fast-track your way to being a top 1% investor... with less risk. Created by Wealth Factory for people who want to build their wealth and keep it.