Start Your Engines on StartEngine.com
I am a little bit late to some things, but when I find something that makes sense, I like to share it—especially if it can make people more powerful. And I found something: StartEngine.com. StartEngine.com is a portal that offers anyone over 18 the opportunity to invest as little as $500 in private companies. It, and other platforms like it, were made possible by changes in securities laws that used to forbid advertising startups to the public.
Investing in private companies is far riskier, in many cases, than investing in companies that have already gone public and trade on, e.g. the NASDAQ. But doing so can mean very high returns, in some cases—sometimes 10 or 20 or 50X one’s investment. And since the investment can be made online, using a bank account or credit card, after perusing dozens of companies and choosing the one (or the ones) that seem most promising, I would argue that doing so makes sense.
In the past, being included as an investor in promising private ventures was reserved for those insiders who knew the founders of the companies or wealthy people who were approached by them. Some wealth managers acted (and still do) as the conduit to these deals for their clients. Hedge funds also invest in them. Now, anyone with a bank account or a credit card and about $500 can.
Should anyone invest in startups in a way that risks his or her financial security? No. But should many, many people avail themselves of the kinds of opportunities aggregated on StartEngine.com and the like—yes.
There’s another reason to spend some time on StartEngine.com: It can kindle your own creative energy and intention. Seeing the number and breadth of extraordinary companies raising funds is inspiring.
One more reason: You have to learn about the companies and think about their prospects and decide whether to invest. You. Not some algorithm. Not the team that runs the mutual fund you own shares in.
By the way, I have no current financial relationship with StartEngine.com. But they’re raising money for their company, on their own platform. So, I’m in for, say, $1,000. Maybe a little more. Because this is one example of technology empowering people, instead of disempowering them. And I like putting my money where my mind is.
Dr. Keith Ablow