There are many options to support startups and small businesses, with the potential for rewards in the future. Most people are familiar with Kickstarter and Indiegogo, where there are various incentives for different contribution amounts, usually discounted products or merchandise. I have found significant value in some projects, I ended up with a free consumer edition Oculus Rift! However, the money lost to several failures, and my desire for less junk, has led me to other crowd-based systems.
Crowdinvesting allows the sale of shares to non-accredited investors, with minimum contributions as low as $500. This can be a lot for many, and high risk, but can be a great opportunity for those of us wishing to support innovative companies, with the chance to share in any success.
Crowdlending is less risky, with minimum contributions as low as $20, and fixed annual rates of return over 20%! Of course, those are loans with high probabilities to default, whether from a short or poor financial history. With the service I use, loan payments are immediately accessible to be reloaned or withdrawn. The companies aren’t as exciting as those found in crowdinvesting, but the loans can transform businesses. I enjoy helping to give a better loan than traditional lenders, so I don’t depend entirely on the financial reward for value. I hear and read many complaints around peer to peer lending, where people want to buy cars and such. I see much greater risk with the purpose of such loans, compared to a business improving their financial situation.
Last and probably most, cryptocurrencies. Buying any of the curriencies often serves as stake in a decentralized system. This is most obvious for options offered through Initial Coin Offerings (ICO), meant to mimic Initial Public Offerings (IPO). Different juridictions treat cryptocurriencies differently, so buyer beware. The underlying principles and technologies are groundbreaking, but it is hard to know which frameworks will thrive. Bitcoin and Ethereum are early leaders, but there are many alternatives hoping to become dominant.
All three options are relatively new to the world, but can help businesses innovate and sidestep other financial systems, with the opportunity of respectable returns for individual lenders. As always, risk only what you are ready to lose. As a Canadian, I use FrontFundr for crowdinvesting, and Lending Loop for crowdlending. I’m aware of SeedInvest in the US for crowdinvesting, but don’t know of any international crowdlenders that focus on small businesses. Many cryptocurrencies can be “mined” from anywhere, or purchased through an exchange. After various issues with exchanges, the common advice is to transfer your crypto off any exchange, and store on a wallet you alone control.