Jared DeValk - Local Marketer

If you have considered investing in #crowdfunding you should read this first. ------ I invested $2,000 in an equity crowdfunding campaign on #startengine last year for Jet.ai (formerly Jet Token). My investment at $0.75/share equated to 2,666 shares in the company. I was notified earlier this year that the company was hoping to go public via SPAC through a merger with Oxbridge. When the final details came out, I was more than disappointed. I was granted 131 shares in the new corp. at $10/share. (131 x $10 = $1,310) Before the company had even gone public, I had lost 34.5% on my investment. To make that unrealized loss even more painful, I wasn't made aware of my number of shares (or how to get them) until TODAY, AUGUST 12th. The transfer company finally emailed me today and trading started yesterday. The price went down 29% so my unrealized loss is even worse. Gratefully, I have a long term horizon when it comes to investing. Plus, it was money that I could afford to lose; however, I didn't even have a chance to cut losses had I wanted to. LESSONS TO CONSIDER I really like the idea of equity crowdfunding. I think giving the little guy a chance to invest earlier in a company is great. BUT BEFORE YOU DO, consider the following: 1. Rule #1 in investing still applies You should only invest money you can lose. Don't invest your rent money or you'll regret it. There are no guarantees, especially with a startup. 2. Have a long-term horizon Jet.ai (former Jet Token) might not make it. You shouldn't assume you can get it out in an IPO. Some go up, others go down. In my case, I didn't even have a chance to trade. However, Jet.ai does seem to be heading in a good direction with increased revenue and decreased expenses, so I'm willing to wait to see how it plays out. 3. Diversify your investing Gratefully, this was a drop in the bucket with my total investment portfolio. In fact, investing in a startup is really risky, so keeping it a small portion of your total investing strategy seems prudent. 3. Go deeper into the details This is something I should have done better. I should have reviewed the financials, the offering, how many rounds they had done previously, etc. In fact, I learned afterwards that they had already done two other equity crowdfunding campaigns on Start Engine for $0.06 and $0.30. Those that got in early are doing well through the IPO. Go deeper to make sure it's worth your time. 4. Don't trust anyone Founders and senior leaders might have an opportunity to do what's right for them at the expense of others and they likely will take it (admittedly, I might as well.) I don't hold malice towards their team, but you can't assume that they will turn a deal down that will benefit them to help you out. That just doesn't happen in business today. Bottom-line, be careful, especially investing in volatile startups. If you do invest, be aware of potential issues like not even being able to get your stock available for the IPO as well as a company stabbing you in the back with a horrible deal before they even go public. Good luck and happy investing. P.S. A legitimate question... Do you think it's an SEC violation that I didn't get notified of my shares until AFTER trading had begun? Plus, they say it takes up to 5-10 business days to get your shares transferred into your brokerage account, meaning it might be up to 2 weeks after trading began before I will have my shares in hand. Seems shady to me, but maybe that is normal? #investing #investingtips #startup #crowdfunding #IPOAlert #ipo #startengine