Just as entrepreneurship is a risky business, returns are not 100% guaranteed for those who engage financially in equity crowdfunding platforms, says Murat.
“The business can fail one way or another, and you will lose your money,” she says. “That’s something, as an investor you have to agree, because investing is inherently risky, even at that low entry level of $ 250.”
In the case of CurlMix, however, part of its WeFunder investors are also its customers, which means they are part of the brand’s success outside of the crowdfunding space. Tim says he sees being “community owned” as a positive thing.
“Typically, these returns that VCs would get are now available to people who look like us, who may not be millionaires or billionaires, so that’s a really revolutionary thing,” he explains. “We just fell behind because that’s exactly what we’ve been doing all this time – pushing the boundaries, trying new things, and making sure we take care of our community along the way.”
Importantly, equity crowdfunding has created more options for entrepreneurs to market their products, services or goods to the world, many of which would have had a harder time doing with traditional financing, says Murat. The founders of Black and Latinx accounted for just 2.6% of venture capital funding, raising $ 2.3 billion in the first eight months of 2020, according to a Crunchbase report.
In the space of crowdfunding in shares, the founders of color access capital, despite the recent origin of the platforms. Since 2017, the founders of Black and Latinx have raised $ 23.6 million on Republic, according to CEO Janine Yorio. This includes Backstage Capital, a black-owned company that invests in founders of startups who identify as LGBTQ, woman and / or person of color, which raised the maximum of $ 5 million in 10 hours.
And with more and more industries tapping into this new way of raising capital, it’s also created options for aspiring investors, to get down to the bottom of the brands they believe in and hopefully. make a profit.
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