Is It possible to do a video explaining all the financial terms? My finance knowledge is very minimal, so terms like “valuation cap/discount/crowd safe” are confusing to me And if I invested in a startup and it went IPO, will my shares convert to stocks, how does the process of investment work? Thank you 😃
As it turns out, we do already have a video going over deal terms! Check it out here and let us know if you have any other questions: th-cam.com/video/0E1H9w3FVJE/w-d-xo.html Regarding your IPO question - if you invested in a company that does go public, your shares would become publicly traded stocks so that you could then buy more (or sell your existing) shares of the company. The only caveat on the sale of your shares is that typically there is a 90-180 day "lock-up period" where pre-IPO owners of the stock have to wait to end before they are allowed to sell their shares.
@@hamidebrahimi7887 Yes, essentially, you are investing much earlier in a company's lifecycle. Because of this, the failure rate will be much higher than public stocks. However, the ones who do succeed and become the billion-dollar unicorns of tomorrow will tend to make up for all the failures. Today, many fewer companies are doing IPOs than in the past, and they are staying private much longer. This means that they are growing bigger before IPO, meaning that public market investors can't buy in as early as they used to (think about Microsoft, Apple, Amazon back in the 1980s and 1990s). Thus, the benefit to investors is that you are essentially investing in a different asset class. You may be familiar with Large Cap, Small Cap stocks. Think of this as going much, much smaller - so the risk is much higher, but if you diversify well and follow the lessons of successful angel investors and VCs, the hope is that you can generate higher returns than investing in large caps (obviously nothing is a guarantee, so that's only the hope today).
It will vary with each campaign and the type of securities being sold. It can also be restricted down to a level below that of the country. For example, as of May 2020, according to the link below, citizens who are within the jurisdiction of the Ontario securities commission in Canada are not allowed to participate on Republic's platform. republic.co/help/does-republic-allow-international-investors Each platform is also different, so it's best to go to the campaign page you are interested in and take a look at their Form C and read any disclaimers, as well as being familiar with your local laws and regulations.
The Discount rate for investors is shown on the terms of each Crowd SAFE on portals such as Wefunder and Republic. For example, let's say you invest in a company with a 20% discount and a $10 million valuation cap. The SAFE, when and if it converts to equity shares, will convert at the lesser of the discount rate OR the valuation cap. That is the price used to calculate how many shares you get - so the lower the price, the more shares you get. Example: if the company was raising their next financing round at a $20 million valuation and converting the SAFEs, then your SAFE would either convert at a 20% discount ($20M*.8 = $16M), or a $10M valuation cap. In this case - $16M vs. $10M - the valuation cap of $10M gives the investor a better deal and would be used to calculate how many shares you get. You are essentially getting twice as many shares as new investors at the $20M valuation. On the other hand, if the company converted and was at the same $10 million valuation, then your SAFE would convert at either the 20% discount ($10M*.8 = $8M) or the $10M cap. In this case - $8M vs. $10M - the discount rate gives the best deal to the investor and would be used when calculating how many shares you get upon conversion.
hi, did you get a return for republic? how can we track the amount of return and when can we get a return ?
what we get for our investments, do these companies offer shares or what, it looks like we just get a thank you card
I already Invested in two startups. They accepted my payment. I am not a US citizen. How will I get paid when the company goes Public? Any Idea?
Thank I can’t wait to have my company on the site
Is It possible to do a video explaining all the financial terms?
My finance knowledge is very minimal, so terms like “valuation cap/discount/crowd safe” are confusing to me
And if I invested in a startup and it went IPO, will my shares convert to stocks, how does the process of investment work?
Thank you 😃
As it turns out, we do already have a video going over deal terms! Check it out here and let us know if you have any other questions: th-cam.com/video/0E1H9w3FVJE/w-d-xo.html
Regarding your IPO question - if you invested in a company that does go public, your shares would become publicly traded stocks so that you could then buy more (or sell your existing) shares of the company.
The only caveat on the sale of your shares is that typically there is a 90-180 day "lock-up period" where pre-IPO owners of the stock have to wait to end before they are allowed to sell their shares.
@@hamidebrahimi7887 Yes, essentially, you are investing much earlier in a company's lifecycle. Because of this, the failure rate will be much higher than public stocks. However, the ones who do succeed and become the billion-dollar unicorns of tomorrow will tend to make up for all the failures.
Today, many fewer companies are doing IPOs than in the past, and they are staying private much longer. This means that they are growing bigger before IPO, meaning that public market investors can't buy in as early as they used to (think about Microsoft, Apple, Amazon back in the 1980s and 1990s).
Thus, the benefit to investors is that you are essentially investing in a different asset class. You may be familiar with Large Cap, Small Cap stocks. Think of this as going much, much smaller - so the risk is much higher, but if you diversify well and follow the lessons of successful angel investors and VCs, the hope is that you can generate higher returns than investing in large caps (obviously nothing is a guarantee, so that's only the hope today).
Hello, Is this platform only for US citizens or people from other countries can also invest ?
It will vary with each campaign and the type of securities being sold. It can also be restricted down to a level below that of the country. For example, as of May 2020, according to the link below, citizens who are within the jurisdiction of the Ontario securities commission in Canada are not allowed to participate on Republic's platform.
republic.co/help/does-republic-allow-international-investors
Each platform is also different, so it's best to go to the campaign page you are interested in and take a look at their Form C and read any disclaimers, as well as being familiar with your local laws and regulations.
CrowdWise thanks
What are the discounts???
The Discount rate for investors is shown on the terms of each Crowd SAFE on portals such as Wefunder and Republic. For example, let's say you invest in a company with a 20% discount and a $10 million valuation cap. The SAFE, when and if it converts to equity shares, will convert at the lesser of the discount rate OR the valuation cap. That is the price used to calculate how many shares you get - so the lower the price, the more shares you get.
Example: if the company was raising their next financing round at a $20 million valuation and converting the SAFEs, then your SAFE would either convert at a 20% discount ($20M*.8 = $16M), or a $10M valuation cap. In this case - $16M vs. $10M - the valuation cap of $10M gives the investor a better deal and would be used to calculate how many shares you get. You are essentially getting twice as many shares as new investors at the $20M valuation.
On the other hand, if the company converted and was at the same $10 million valuation, then your SAFE would convert at either the 20% discount ($10M*.8 = $8M) or the $10M cap. In this case - $8M vs. $10M - the discount rate gives the best deal to the investor and would be used when calculating how many shares you get upon conversion.
Discounts confuse me
Great video