Startups & equity crowdfunding
High riskWhat it is
Buying a small stake in a young, private company — either as an angel investor writing a larger check, or through a regulated equity-crowdfunding platform that lets many people back a company with small amounts each. Money is locked away for years with no way to sell early.
How to buy it
Regulated equity-crowdfunding platforms now operate under securities-regulator supervision in Brazil, Mexico, Colombia and Chile, letting ordinary investors participate with relatively small tickets. For a full treatment of the routes, from crowdfunding tickets to angel checks, invertirstartups.com covers that world in depth.
Pros
- Access to potentially large returns if a company succeeds
- Crowdfunding tickets can be small, unlike traditional angel checks
- Genuinely diversifiable if spread across many small bets over time
Cons
- Most startups fail — a total loss on any single position is a realistic outcome
- No liquidity: money is locked for years with no public market to sell into
- Hard to evaluate without real diligence — this is not a place to follow tips
A worked example
A common pattern among experienced early-stage investors is spreading a fixed, affordable budget across many small positions rather than one large bet — because the return profile is lottery-shaped: a few big winners are expected to make up for many total losses, and nobody can reliably pick the winner in advance.