Exploring new financial assets is fun. By studying investments vehicles myself, I can decide to use them or not. That is how I got into options, that is how I got into crowdfunding.
The first real experience with crowdfunding was via Kickstarter. This was an interesting experience. The short story: One day, I noticed I was spending way to much time and money and went cold turkey. Now, I no longer use the platform. It is not so much the campaigns I funded. Most delivered as described and in a reasonable timeframe. The problem: when I got onto the platform, I was not as intentional as I am today with my view on things, fun money and experiences. Would I see something fun, interesting or cool, then I funded. This leads to a lot of wanted stuff, not needed items.
I look at that period as a necessary stage towards my current view.
(yes, that toll is spinning)
At the same time, different Belgian crowdfunding initiatives start to get attention and news time. I decided it was time to dip my foor in the water.
In 2012, I entered a cooperative equity investment in green energy. It would pay 6pct dividend, tax free. Yiehaa…let’s go. This one needed a bail out. I never saw any dividend and now have to wait a few years to get my money back. That means a loss, as there was inflation in between. The idea was good, the execution not so much, lot’s of financial doubtful constructions and private interests by executives.
In 2014, I invested a 250€ equity investment on an app to help divorced parents communicate and organise for the well-being of their children They are now rolling out to the US it seems, as observed in the 2nd crowdfunding campaign they did.
A second one was a 500€ obligation in a local installer of LED lights. The money is used to fund the working capital of the projects. So far, the first coupon was paid on time.
A third investment is a 200€ obligation in a good cause project, set up by local entrepreneurs. They started a taxi service in Africa, that is safer and more reliable than the current local offering. The managers have a strong entrepreneurial background and have proven management skills. And they provide half of the obligation themselves, next to the equity capital of the company. I see this more as a donation than as an investment. No denial here, it does pay a coupon.
The last one is an investment in a company that produces underwear for men. I had bought their products before and liked it. My investment of 100€ yields already 20pct as they gave the investors products for the new year… 🙂 happy me.
- Due to the lack of a secondary market, these are very illiquid investments. It is near impossible to define the current market value and to find a buyer. When you need cash, you can not sell them.
- There remains a distance between you and the company. They typically have no investor section in their website to get info or an update. So far, I feel blind. The feedback via the crowdfunding platform is not meeting my needs.
- I would use it again to fund good causes, especially when there is a big group of experience managers or an organisation behind.
So, until further notice, I no longer deploy my money here. There are better places to go.
Do you have any feedback?