Equity Crowdfunding is being championed as the technology paradigm revolutionizing early-stage/private company investing. And it is! But there is more to come and that includes the launch of Crowdfund funds.
Leveraging "Direct" investing to lower/eliminate historical fee structures (~Venture Capital's "2" and "20" and Angel Groups' annual dues and for both - high investment minimums and access issues), Crowdfunding has the promise to increase the attractiveness of private equity investing for the majority of Accredited investors who have chosen not to participate in this attractive asset class (roughly only 5% of the country's ~7.5MM Accredited investors have exposure to private equity but mainly through venture funds).
The last part of the above statement is important; those Accredited investors deciding to invest in private equity prefer to invest via more guided/curated vehicles offering diversifcation across multiple companies. In response, many Crowdfunding portals are launching Crowdfund funds along with direct investing. Of interest:
FundersClub's Themed "Funds"
- Health & Wellness
- Bitcoin & Payments
- Hardware.
Poliwogg's "ETF's"
"Indicate your interest in investing in products based on our indexes and we will send you information and links to the institutions offering the investment products when they beome available. These investment products will be offered by third parties."
HealthiosXchange's Syndicates (The Champion's Progam)
HealthiosXchange's Syndicates empower industry leaders (CEO’s, Board Directors, Angels, Senior Advisors) to organize their own investment groups. Lead investors can invite accredited investors to participate alongside them in special purpose funds (SPF's), which become investors in a portfolio of emerging growth companies.
Each of these portals fund structures rely on industry experts with respective track records to select companies with most promise of realizing 2x> returns over 3-5 year periods via M&A or Initial Public Offerings (IPO). In the case of FundersClub and Poliwogg, they rely on advisory boards and portal management to curate deals whereas HealthiosXchange empowers industry leaders (executives with proven track records of successful exits) to Lead Syndicates from the platform's 5,000 companies.
Crowdfund funds will continue to fuel the technology revolution we are witnessing in the private equity/financial makets providing vehicles familiar to investors (~venture capital) offering convenient access to promising companies in environments not requiring investors to select companies (time intensive). As such, these platforms may appeal to those without the time or comfort level to select the best investment opportunities (~self-directed IRA's).
It is clear. Equity Crowdfunding is evolving to meet the needs of investors seeking lower cost structures (Direct Investing) and those more comfortable following leading experts via Crowdfund funds.
Next up will be Angel Groups and Venture Funds deciding to launch Crowdfund funds like HealthTech Capital on HealthiosXchange's platform, http://healthiosxchange.com/. Viva La Revolution!