The greatest risk of crowd investing lies within the unvalidated business model of the company. When making an investment decision, it is worth considering the following aspects:
The management of the company – experiences and dedication of the founders and managers
The vision- how do they envision the company in 5 years’ time
The business model – considering profitability and risks
The size and dynamics of the target market, which defines the potential of the company, as well as the competition on the market and the bargaining power of the company
If the company would like to go to market with something brand new, then the demand for that product/service should be demonstrated (the so-called product-market fit)
The strategy ensuring sustainable development and its risks
Corporate governance, transparency of decision-making and a scheme to motivate employees
As opposed to other forms of capital increase, crowdfunded companies go through a thorough examination, including the following:
during the preparation for the Campaign the portal checks the validity of the campaign documentation
the Lead investor conducts a due diligence process
during the Campaign users can raise their questions about the company via the online forum (crowd diligence).…
