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Guide

  • Who can invest in these companies?
    In 2016, Congress passed the JOBS Act, which allows private companies to solicit fundraising from the public. In most cases, anyonecan invest in the companies listed on Crowdonomics, subject to SEC limits based on income and net worth.
  • How do I make money?
    Realizing a return on your investment takes different forms based on the investment type. Revenue shares, loans, and convertible notes usually get a return by receiving repayment on the debt, whereas SAFEs, convertible notes, and common/preferred stock require an "exit" of some type - the company being bought or listing shares publicly on a stock exchange.
  • What do the different investment types mean?
    Every deal has its own unique contract, so be sure to read each prior to investing! That said, here are some general guidelines as to what the investment types mean: Preferred Stock - stock in a company that is senior to common stock, can have special dividend rights or liquidation rights (ensuring a return prior to common stock, for example) Common Stock - similar to a share of a publicly-traded company SAFE - "Simple Agreement for Future Equity," this means you have no true legal ownership until the agreement converts. It helps simplify the company's ownership structure until the next priced round of stock. Convertible note - a loan that can be traded (i.e. converted) for equity prior to the due date at some pre-determined value Revenue share - the company will give a percentage of revenue as repayment until a multiple of the principal is repaid, or the due date is reached
FAQ
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