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Is MicroVentures right for you?
Founded in 2009, MicroVentures is an equity crowdfunding platform offering investment opportunities for accredited and non-accredited investors (accredited investors are individuals with a net worth of at least $1 million or annual income above $200,000), institutional investors, and startups.
The investment platform falls among the ranks of other popular companies (e.g., SeedInvest and Republic) that have made venture capital investing — or startup investing — accessible to the public.
You can purchase shares of a crowdfunding offering with as little as $100, but other investment listings may require more.
Not sure if MicroVentures is right for you? Keep reading to see how it stacks up against other platforms.
How does MicroVentures compare?
MicroVentures, Wefunder, and SeedInvest all connect startups to fundraising opportunities and investors to up-and-coming private companies. However, the platforms vary when it comes to investment minimums, fees, features, and investment listings.
The difference between SeedInvest and the other two is that SeedInvest provides automated startup investing. This feature has a $1,000 minimum requirement, but it diversifies your portfolio with startups that meet your preferences.
But MicroVentures beats both when it comes to fees. It charges no fees for non-accredited investors who participate in crowdfunding offerings, but you’ll have to pay at least 2% at both Wefunder and SeedInvest.
Ways to invest with MicroVentures
Self-directed investing
MicroVentures is accessible to everyone, but its investment offerings vary for accredited, non-accredited, and institutional investors. It offers three options:
- Accredited investing: If you’re an accredited investor, the platform gives you access to both early- and late-stage private market investments. While it’s equity crowdfunding listings are publicly accessible, you’ll need to sign up for an account to see its accredited opportunities.
- Equity crowdfunding: This investment option is available to all investors, and it includes a vast range of startup investments (most with a $100 minimum requirement) that MicroVentures has vetted and performed due diligence on. You can see both its active opportunities and previously funded campaigns here.
- Secondary trading: MicroVentures also offers buying and selling opportunities for late-stage private stock. Late stage private stock represents secondary shares of private companies that have surpassed the early stages of fundraising and have remained private for an extended period of time. Accredited and institutional investors can purchase shares of these companies, but you’ll need at least $50,000 t0 begin.
If you’re wondering how much it costs, non-accredited investors won’t have to pay any fees for Regulation CF or Regulation A offerings. However, there are several fees that may apply for accredited investors who buy into Regulation D (private investment funds) offerings. These include a one-time 5% placement fee and 1.5% offering costs fee, 0.50% management fee, and 10% carried interest fee.
Raise capital
There are also multiple fundraising options for startups or small businesses. MicroVentures specifically aids companies looking to raise between $150,000 and $1 million, and it offers support through Regulation Crowdfunding, Regulation A, and Regulation D.
As for fees, the amount you pay will vary depending on your type of fundraising campaign and how much you’d like to raise. However, you can generally expect the following:
- Upfront costs: You’ll have to pay $1,000 for a legal review and $1,500 for Form C (this form is an offering statement that startups file when they need to raise money for expansion). If you want to raise more than $107,000, you’ll also have to pay between $3,000 and $5,000 for outside financial review. Finally, you can pay between $100 and $1,000 if your business sits in a state that mandates notice filings. This fee also applies if you sell at least 50% of your securities in that state.
- Closing costs: These include a 5% commission, 2% equity fee, and an escrow fee of $1,000 or 0.35% (whichever is higher).
- Optional costs: You can also pay for outside marketing and video production, but these fees will vary.
As for eligibility, MicroVentures says it looks for business with a unique idea or innovative approach to old technology. It also reviews the business’ team, traction, market size, and other factors. Once you apply, it can take six weeks to receive final approval and a funding date. The investment platform says you can receive funding within two weeks after fundraising is complete.
Education and investing resources
When it comes to educational resources, MicroVentures mainly offers blog articles that delve into deeper detail about its investment products. The platform also has a glossary that features more than 3o articles on terms like “accredited investor” and “preferred stock.”
As you’ve likely already guessed, startup investing requires significant research. MicroVentures makes this process easier by providing insights on countless companies. With these resources, you can stay updated on company news, team management, investors, and more.
Is MicroVentures trustworthy?
Personal Finance Insider assesses company trustworthiness by reviewing each investment platform’s Better Business Bureau profile. BBB ratings range from A+ to F, and MicroVentures currently has a B- rating.
When researching businesses, the bureau looks into customer complaint history, licensing and government actions, advertising issues, business practices, and other factors. It says MicroVentures’ rating stems from the investment platform’s failure to respond to one complaint filed against them.
MicroVentures has closed two complaints in the last three years and zero complaints in the last 12 months.
