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Investments And Jobs

Investment and Jobs

Angel investors are individuals who provide startup capital to future entrepreneurs mostly in exchange for equity or convertible debt. Family members or friends often perform the role of angel investors. The money they provide can be a one-time injection or continuous investment over a certain period. While many other lenders invest only in viable and established companies, angel investors choose to support new businesses. The Security Exchange Commission regulates Angel investors, and one must have a net worth of not less than $1 million and make more than $200000 annually. Such people invest using their own money, unlike other investors who use funds mobilized from groups of people.

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Angel investors clubs are groups formed by angel investors together with like-minded individuals. The clubs enable the members to pool resources together and provide advice to respective portfolio companies. Members of angel clubs are required to be present at every event. However many have embraced investment crowdfunding. It enables the investors to participate at home via the internet, and it is more flexible in terms of the amount one can inject. Club members are also required to invest a specific amount of money in the group annually. The amount each member contributes differs from one group to another.

Crowdfunding is a way to fund a business venture with small contributions from a large group of ordinary people instead of receiving a massive amount of capital from a small group of investors. The fundraising is done online through specific websites in collaboration with social networking sites. An entrepreneur will present his ideas through one of the crowdfunding websites such as Kickster, and anyone interested in funding the project will express his interest. The investors get various forms of rewards ranging from a stake in the business to an individual prize of participation in the company.

An accredited investor is an individual or institution who has been authorized by the Security Exchange Commission to trade unregistered securities. Trading unregistered securities mean that this group of people is not subject to rules that govern securities exchange. An accredited investor must have assets of more than one million dollars and an income of $200000 annually. Institutions must have assets of more than $5 million. The purpose of this kind of investment is to protect non-sophisticated investors. Those who participate can take the risks that come with certain investments.

The Jumpstart Our Business Startups (JOBS) Act is a law that facilitates the funding of startups and small businesses by easing the rigid regulations in the securities exchange market. The law makes it easy for small and medium entrepreneurs to access funding, especially via crowdfunding. The law makes it easier for businesses to go public because the revenue that they require for such an undertaking is less than the previous one. A company with an income of fewer than one billion dollars can go public if it obtains permission from the exchange authorities. The law also simplifies the procedure of selling businesses’ shares to private investors.

The Jumpstart Our Business Startups (JOBS) Act makes provision for small businesses and startups to offer equity to any individual with interest and money through crowdfunding. The law further states that an investor does not have to be accredited to invest in a company of his/her choice. The capital threshold of money that a company can raise reduces to $5 million annually. The law also makes it easier for one to become an angel investor. Previously under the Securities Exchange Commission, an individual needed to have assets of more than 1 million dollars to qualify as an angel investor. The Jumpstart Our Business Startups (JOBS) Act allows any person with an annual salary starting at $100000 to become an angel investor. Such an individual can invest 5% of their yearly income or $2000. The individual can also choose to give 10% of their annual income.

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The Specific Amount I will Invest and the Expected Returns (a budget of $ 20000)

  • Pardoes Solicitors ($ 1000 debt) – This is a successful law firm that has been in operation for more than 100 years. The funds are going to be used to expand the business and hire more lawyers. I expect to earn $1300 at the end of 36 months with an annual interest of 10% per year.
  • Cubana (Waterloo) Ltd ($ 500 debt) – It is a restaurant that specializes in a variety of Latin food. Investing in the food business is safe because it’s an essential commodity no matter how the economy is performing. I expect to earn $600 at the end of two years with an interest of 10% per annum.
  • Whites Group ($ 1000 equity) – This is a software group of companies that help businesses increase their efficiency. I would invest in the firm because the market for software companies is always expanding and there is not enough supply. I expect to receive an average income of $111 per year based on a 9% rate.
  • Daisykins ($500 debt) – It is a group of daycares that provide service to working parents. It is an excellent investment opportunity because many parents are ready to pay any amount to have trustworthy people to care for their kids. I expect to earn $700 at the end of 48 months.
  • Troy Foods ($ 1000 debt) – It is a food company that specializes in home deliveries. There are a growing number of working-class people who have no time to prepare meals, and this can be a good alternative for them. My returns will be $1360 at the end of 36 months.
  • Eagle Freight Terminal ($1000 equity) – It is a delivery company that offers logistic services by road, air, or sea. The company has clients around the world, and the business has been growing over the past years. I will earn $100 per year with my investment.
  • Crowd2Fund ($ 2000 equity) – It is a crowdfunding company. The company is valued at $40 million and has successfully helped others to raise funds. I will earn $48000 by the end of five years.
  • Brazilian Centre ($ 500 debt) – it is a group of companies that cater to Latin, especially Brazilian, expatriates. The company helps immigrants from these countries to get a place where they feel at home. I will get a return of $ 650 at the end of 36 months.
  • Reloca Broad ($1000 debt) – a company that helps people to rent houses for short, medium, or long stays. The apartments offered by the company are fully furnished to make their customer’s stay comfortable and secure. I expect to make $1300 at the end of 36 months.
  • Remote Software Solutions ($ 1000 debt) – A software company that provides IT services. This is a highly profitable business as many people are looking for qualified IT providers in this digital age. I expect a return of $1240 at the end of 24 months at an interest rate of 12 months.

Crowdfunding allows an investor to fully participate in the project and offer his ideas. When investors inject money into a project through crowdfunding, they also get the right to control the decisions in the business. For example in 2016 investors in a crowdfunding site, Kickstarter raised close to $ 1 million to fund a new digital watch. Apart from providing funds, they had an opportunity to influence the final design of the clock. Some people are invited to the launch of the new product business to participate in presenting it to the world.

Crowdfunding allows people to invest in projects and ideas that are dear to them. The small amount of initial capital required means that one can participate in a project they believe in more easily. For example, if one sees that his/her favorite nearby restaurant is fundraising, he/she can inject a certain sum through crowdfunding. The beauty is that people do not always invest to get returns back. Some people just want to see their favorite business grow. In exchange, the company can send personalized gifts to those who participated in the fundraising process.

However, crowdfunding poses certain risks to investors. Firstly, not all sites are regulated and authorized to fundraise. Thus, if using websites that the authorities do not monitor, one may run into dishonest people. An entrepreneur may raise funds for a non-existent project. Alternatively, a person may raise funds and never keep the word and provide the returns the investors should receive. The investors may not hear from him/her again regardless of the success of the project. People interested in crowdfunding should first make sure that relevant authorities recognize the website or social platform they are using.

Crowdfunding fails to advise aspiring investors. People who have no experience with investing and fundraising may not know which project is more suitable. For example, people who have extra funds can choose a loan portfolio and recoup the money later with interest. An equity-based portfolio may be ideal for someone who wants to own a stake in the business he/she is investing in. Most participants do not have access to this kind of information. They end up with arrangements that do not work for them together with unmet expectations. People who intend to raise funds or fund projects via crowdfunding should first educate themselves on the portfolios, risks, and opportunities.

The Amount I will Invest in Startups with a Budget of $ 100000

  • Robin Hood – is a stock trading app where users can buy and sell from their smartphones. I would invest in this company because stock trading is an activity that has been around for years thus, making the activity available via phone will draw more people. I would spend $20000 in this firm as debt for two years. The expected return is $24000.
  • Laurel & Wolf – the firm connects people to interior designers through the Internet. I will invest in this company because many people desire to transform their homes. The problem is that they either cannot afford it or they cannot find good designers. The firm offers a solution to this problem. I will invest $10000 for 36 months as debt. The returns will be $13000.
  • Game Time – a Company that sells online tickets to entertainment events. I will invest in the company because it is the first ticket company to gross $ 50 million in recent history. I will spend $ 40000 in debt for five years. The returns will be $ 60000 at a rate of 10%.
  • The Skimm – is a daily newsletter that targets millenniums. I will invest in this company because it has a regular readership of 4 million young people. I will spend $10000 in this business for 24 months and get a return of $12000.
  • Zip Line – a firm that provides drones that are used to transport lifesaving supplies like medicine. It is the first drone company to provide delivery services in the world and make a profit. I will invest $10000 in the firm for 24 months and get returns of $12400 at a rate of 12%.

Angel investing involves knowledgeable and experienced investors, unlike crowdfunding where most of the investors are newcomers without much experience. A well-informed investor will offer advice to the business owner of the project he/she chooses. Further, such a person also has a good idea of the type of portfolio he/she wants. He/she may accept a loan or equity-based funding from an informed point of view. Such an investor is also able to balance the owned collection so that in case a particular investment does not work well; others can compensate for the losses. Information is critical when it comes to any investment because it helps parties involved make informed decisions.

The risk with angel investing is injecting too many investible assets. An investor should have a limit on the percentage of funds he/she can invest in angel projects at a time. It is wise that an individual investor should limit the contribution to 10% per year. Most organizations restrict their portfolio to only 5% for venture projects. The risks associated with startups are high compared to established businesses and it is prudent to approach them with caution. In case the project fails the investor will not face too much risk. An investor should have a diverse portfolio to get revenue from several other sources in case one plan fails to take off.

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There are some startups that I would like to work for at the moment;

  • Greatist – is a digital health and fitness company located in New York that helps people to make healthy food choices. The best opportunity that comes with working for Greatist is that as an employee I also gain access to healthy foods and fitness programs. The downside of this work is that one is expected to maintain extreme fitness standards to be an excellent example to the clients. Practicing what the company teaches the clients is vital to keeping the job.
  • Groove Commerce – is a digital advertising agency with a focus on branding, marketing, and e-commerce. The best thing that comes with working for the company is that I get hands-on coaching from the CEO of the firm once a week. The risk is that while digital marketing is an important part of advertising, the future of an employee is not guaranteed as the skills that one requires in digital marketing keep changing.
  • Nexus – the company focuses on providing IT staff to organizations throughout the USA. The best opportunity that comes with working for Nexus is that everyone has an equal chance for growth because there are no hierarchies in the business. The old and new staffs are similar. The risk is that people who have worked for Nexus for a long time feel less appreciated and seek opportunities elsewhere. Every employee wants to be rewarded for the length of service.
  • Parking Panda – is a company that helps individuals to find and reserve parking spaces using their phones or computers. Working for the company, I will get an opportunity to use taxi services at a much discounted price. The risk of working for Parking Panda is that there are few opportunities for personal growth and the development of new skills. A firm should offer ways for employees to improve.
  • Privy – is an online marketing firm that connects companies with potential customers. The advantage of working for Privy is that the firm links successful investors with their employees to mentor them. The risk is that as a worker you have to keep changing job roles to stay in the firm. Stability in a job is essential for many employees.
  • Spare Foot – is an online company that helps customers finds and book storage spaces. The company does other businesses such as marketing and advertising so as an employee I will be exposed to different fields of work. The downside is that the skills acquired working in booking spaces online may not be sufficient to apply for other jobs. It is essential to possess’ abilities that meet the expectations of the employers.
  • Spark House – is an online video production company. The advantage of working for Spark House is flexible work hours. An employee can have time to pursue other interests. The risk is that there is no job security in the company.
  • Sputnik Creative – is an online branding studio. The best aspect of working for the company is that as an employee one gets to work and collaborate with teams from other companies. The company continually replaces its workers in search of the best team. The flip side of this strategy is that the continuous replacement of workers may result in a lack of security.
  • Thanx Media – a company that provides e-commerce solutions. The company encourages its workers to make mistakes as a process of challenging themselves. The risk is that one may make a costly mistake and end up fired from the firm.
  • Insurify – is a company that provides people with the opportunity to compare car insurance rates. The company has a small group of employees meaning that one has one-on-one time with the CEO. The risk of working for the firm is that as an employee you have to work long hours. This may corrupt the work-life balance.
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