The Startup Investing Guide
What is Startup Investing?
Startups are young, early-stage companies that need funding to grow and serve their market. To raise capital, they often offer a share of their ownership—called equity—to investors. These businesses are typically built around innovative ideas and aim to grow quickly in high-potential industries.
Who Invests in Startups?
Historically, startup investing was limited to Venture Capitalists. Today, equity crowdfunding has opened the door for anyone to invest in startups, sometimes with as little as a few thousand dollars. Individual early-stage investors are often called Angel Investors.
Accredited vs. Non-Accredited Investors
In the U.S., investors are classified by the SEC as either accredited or non-accredited:
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Accredited Investors must meet certain wealth or income thresholds (e.g., over $1 million in net worth, excluding their home, or annual income over $200,000).
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Accredited investors often get access to more exclusive investment opportunities.
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Non-U.S. investors may also participate if allowed by local laws and platform rules.
Startup founders ultimately decide which investors they accept.
Crowdfunding Growth
In the past decade, crowdfunding has experienced remarkable growth, with lending-based crowdfunding emerging as the primary driver. Equity-based crowdfunding has also shown significant expansion, contributing notably to the sector’s overall momentum.
Crowdfunding Models:
■ Lending Crowdfunding
■ Equity Crowdfunding
■ Hybrid-based Crowdfunding
■ Royalty-based Crowdfunding
■ Donation & Reward Crowdfunding
What is Crowdfunding and Major Project Categories
Crowdfunding is an online fundraising method that enables individuals or organizations to raise money from a large number of people—collectively known as the “crowd”.What Is Crowdfunding?
Crowdfunding typically involves three key participants:
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Project Initiators – Entrepreneurs or individuals who present a detailed project or idea seeking funding.
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Contributors – People or groups who are willing to support the project financially.
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Crowdfunding Platforms – Online platforms that connect project initiators with potential contributors.
