FINRA’S announcement likewise provides help to investors for them to assess whether crowdfunding is appropriate for them. Here are some helpful tips:
1. Determine whether you can take the risk as well as the possible loss you may incur. There is no argument that startups and early-stage businesses can fail. Be prepared then to lose every dollar of your investment, when it does happen. Likewise, remember that your capability to resell your investment will be quite limited during the first year. Hence, you may have to let your investment stay the course for quite a while until new opportunities present themselves.
2. Keep updated and well aware of the financial and educational information, as well as other reports furnished by the issuer and crowdfunding brokers. Do not hesitate to seek answers for your immediate concerns regarding the investment, such as possible loss of your investment. Seek the opinions of unbiased professionals and other investors, for instance, an accountant who comprehends financial statements and who may not have any personal stake on the investment.
3. Consider the possibility of fraud. Safeguard your interests by studying how scammers can dupe you; so you can avoid them. Get in touch with investment professionals through BrokerCheck, and visit FINRA’s Funding Portal website on www.finra.org which went online on May 16, 2016.