Investing in startups is crazy risky. The chance of sinking money into a startup that runs for a bit, putters out of gas and dies without ever getting your principal investment back to you — let alone any return — is very high.
There is, however, a chance of making a very attractive return on your investment. Chances are, if you do see a return, it won’t be the sort of Facebook 2.0 overnight wealth that fuels Silicon Valley pipedreams. Even still, investors can indeed be rewarded handsomely for taking a savvy risk on the right startup.
How does that work, though? We answer that in our fourth episode of Crowdfund with Cat. In particular, what needs to happen for an investor to make money on an equity crowdfunding investment?
Alon Hillel-Tuch, a co-founder of the crowdfunding platform RocketHub, breaks the language of equity crowdfunding investing down for us into simple, easy to understand language. Promise.
The rules and regulations surrounding equity crowdfunding changed — in pretty significant proportions — on May 16. For a comprehensive dive of how the rules are changed, check out our series of written stories on equity crowdfunding (linked to below).