When Snapchat’s IPO took place, it became a big story in the world of investment. It’s share price closed at $24.48 from its offer price of $17 and made a single-day growth of whopping 44%. Its first-day pop was bigger than Alibaba’s, Google’s and Facebook’s!
So, what’s the scoop behind the success of these dream IPOs? What makes these companies with their offerings to the world “most wanted” on investors’ list? Oh, but before I begin to shed light on these questions, let me tell you about a catch here!
The catch is that common retail investors like you and me wouldn’t have been able to buy Snapchat at $17. Most startup IPO’s only allow certain investors to invest at their early stage. Now, I know what you’re thinking: why would I get involved in investing? Why should I consider investing in an early-stage startup? What differentiates one startup from another?… etc, right?
Ok, let me give you a little background about how this opportunity was created for everyday people like YOU and ME who could invest with innovative early-stage startups. Prior to June 2015, investing in startups was reserved for only accredited or the “wealthy” people with a net worth in excess of $1 million. But, luckily that changed and according to the new law passed as part of Jobs Act 2012, called Regulation A+ allowing non-accredited investors to invest in the early stage of the companies of their choosing. And the law says that a non-accredited investor cannot invest more than 10% of his/her annual income.
So, whether it’s about the idea, about the founder or the passionate team that is driving the show, a great opportunity in a familiar market or a simple solution to an impending problem, investing in an early stage startup is in the words of John Doerr –
“The best way to predict the future is to invest in it. The second best way is to finance it.”
Learn more about 4 best reasons why you should too invest in an early stage startup, if you haven’t already!
1. Low risk, high reward
Investing in a company at the early-stage involves its share of risks, that’s true, but believing in the myth that it is only reserved for big players is not right. With the new parameters drawn in Reg A+ offering keeping in mind the interest of a retail investor, anyone can put in the desired amount in a company they know and love and reap on potentially high returns when the company’s success reaches out of the park. Joining these companies at the beginning might just be the start of a long-term fulfilling journey for an investor.
2. Be active part of a team that needs you
Investors who invest in smaller companies or startups generally play more active and important roles in the company. They have a bigger say in their business model, management and team strategies than those of established companies. Most startups provide voting rights to shareholders making it possible for them to be a part of consequential decisions that the company will take in the future.
3. Get connected at the right time
One of the many reasons that early-stage startup investment is a good investment is because the price at which you co own a company at the beginning that’s not listed yet is usually at a lower face value. And that’s a good thing, because once the company gets listed and as the investors’ circle expands more and more, the price of shares is bound to go up. This means that the potential high return that an early-stage startup investor gets as compared to the returns that a later-stage investor shall be entitled to will be more or less the same.
4. This is your chance to bring something good in the world
The core crux of most startups is to bring some real changes to the world which industry-leaders may not have addressed to yet with innovative products and services. Your investment these life-changing businesses, will not only determine the success of their products and services but will also have an impact on the people who will benefit out of them as users and consumers.
Investing in a company that’s relatively new generates a lot of question, but a company who can give you the definitive answers to all your questions and has a vision with a potential to make our way of living better is always worthy of an investment consideration.
We here at Sagoon have the vision to create a world where everyone earns while socializing, if you’re interested to be a part of a mission to revolutionize the landscape of social media, please visit www.sagoon.com/invest.