Crowdfunder launches a VC fund for the crowd

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TechCrunch | | April 7, 2016

Crowdfunder VC IndexAngel investors who wish they could invest alongside top-shelf VCs like Andreessen Horowitz, Greylock and 500 Startups finally have an opportunity to do just that. Crowdfunder today announced the world’s first VC “Index Fund,” which enables smaller investors to get involved with much bigger deals while still being able to spread their investment risk.

If you’re able to pick the right companies in which to invest at seed stage, you can make mega bucks. There’s only one problem: Picking the right companies is really hard, the vast majority of startups fail and of the ones that survive, only a tiny fraction go on to become unicorns. So what is a poor investor to do?

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In the context of the stock market, there’s a solution: If you aren’t particularly good at picking stocks in the stock market, you can invest in an index fund that tracks a broad number of companies, such as the S&P 500 or the Dow Jones Industrial. Instead of relying on the performance of an individual pick, you can spread your risk by in effect putting your money in all the companies in the index. This, in turn, means that if the stocks for those 500 companies perform well on average, the value of your share of the index fund increases.

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The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support and networking opportunities to over 1300+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more About Us or visit www.ncfacanada.org.

 

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