Considering the Appropriateness of an Investment in Crowdfunding
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Considering the Appropriateness of an Investment in Crowdfunding

By March 15, 2020 September 26th, 2022 2 Comments

Appropriateness of Investing In Crowdfunding

Is investing in crowdfunding for everyone?

The possibility of investing in startups can sometimes overshadow the most important question when making an investment: “Is this investment right for me?” There many factors that an investor should consider when determining the appropriateness of an investment in crowdfunding. PicMii loves to see investors getting involved with crowdfunding and contributing to companies on the platform, however we also have each and every investor’s best interest at heart. This means stopping for a minute to discuss considering the appropriateness of investing in startups.

Do you understand the risks?

Although investing in startups can be extremely lucrative, it can also go the other way! For this reason, it is important for each investor to understand the risks associated with an investment in a startup. Risks include but are not limited to:

  • Illiquidity – Investments on the platform are generally illiquid. PicMii does not offer a market for selling securities once an offering closes and the regulation set forth by the SEC contains additional restrictions on resale of your equity.
  • Speculative – The terms set by the issuer in crowdfunding are generally speculative. This just means that companies generally set their own terms, which includes their own evaluation. For this reason, among many others, it is critical that each investor do their own research and utilize all educational resources provided to them.
  • Loss of Some or All of Your Investment – Investments on the platform are considered high risk. These are startups and, unfortunately, not all startups succeed! If a company is unsuccessful, you risk losing your entire investment.

Again, it is critical that each investor do their own research and utilize the educational tools provided to them through the platform and beyond. PicMii provides this educational blog, an extensive FAQ page, additional educational pages, as well as communication gateways with the issuers to ask additional questions. Please use all of these resources to your advantage!

Can you afford to lose your entire investment?

When making an investment in a startup on the platform or elsewhere, it is critical to consider if you can afford to lose your entire investment. Since the risk of losing your entire investment exists, as well as the inability to access the funds due to the illiquidity of your investment, you must ensure that you can survive without those funds.

Investments in startups should not be undertaken with funds that you need. Funds used to invest in startups should be extra money that you can afford to risk in return for the potential returns resulting from the issuer succeeding.

The PicMii Way

At PicMii, we believe it is important for each investor to pause prior to making an investment to ask yourself the following questions:

1

Do I need these funds now?

If the funds you are looking to invest aren't dispensable, then it might be a good idea to reconsider the investment, or wait until you have more funds available! Again, these investments are most often illiquid and you may not have access to them for some time!
2

Did I consider all of the educational material provided to me?

PicMii takes investor education seriously. We ask you to take a moment to really consider if you have fully taken advantage of the educational resources provided to you prior to making an investment. If you haven't, it might be a good idea to research more prior to making an investment!
3

Can I afford to lose my investment?

Again, investing in startups involves the potential to lose your entire investment. Therefore, it is essential to consider this risk prior to investing. If you cannot afford to lose your investment, it might be best to reconsider your investment, or wait until additional funds are available.

Here To Help

PicMii is always here to help and answer any questions you have about the platform or about crowdfunding in general. We must remind you that we are not authorized to provide investment advice or recommend a specific offering on the platform, but we are happy to provide you with as much information as we can to help you make the most informed decision you can. You can always reach us at support@picmiicrowdfunding.com.

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WHEN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING. THIS INCLUDES ANALYZING THE MERITS AND RISKS INVOLVED WITH INVESTING IN THE OFFERING. INVESTMENTS ON PICMII CROWDFUNDING ARE SPECULATIVE, ILLIQUID, AND INVOLVE A HIGH DEGREE OF RISK. THIS RISK INCLUDES THE POSSIBLE LOSS OF YOUR ENTIRE INVESTMENT.

Unless otherwise stated all securities-related activity is conducted by PicMii Crowdfunding, LLC, a funding portal registered here with the US Securities and Exchange Commission (SEC) and a member of the Financial Industry Regulatory Authority (FINRA). PicMii Crowdfunding, LLC is not a registered broker-dealer and all activity involving escrow/holding funds is performed by Enterprise Bank and Trust, an escrow agent registered with the U.S. Security and Exchange Commission. PicMii Crowdfunding is compensated with an up-front fee and a percentage of funds raised in each offering. Fees may vary between offerings and investors should review the Form C linked on each offering page for PicMii's specific compensation for each offering.

Regulation Crowdfunding offerings (JOBS Act Title III), which are offered to both accredited and non-accredited investors, are made through PicMii Crowdfunding, LLC. Although these offerings are open to the general public, all securities offered on PicMii Crowdfunding have not been recommended or approved by any federal or state securities commission or regulatory authority. PicMii Crowdfunding does not provide any investment advice and does not provide any legal or tax advice with respect to any securities. All securities listed on The Platform are being offered by, and all information included on this site is the responsibility of, the applicable issuer of such securities. PicMii Crowdfunding does not verify the adequacy, accuracy or completeness of any information provided by the issuer. Neither PicMii Crowdfunding, nor any of its officers, directors, agents and employees makes any warranty, expressed or implied, of any kind whatsoever related to the adequacy, accuracy, or completeness of any information on this website or the use of information on this website.

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