What is Equity Investing?
Equity investing means investing money in a company by purchasing its shares of stock.
All equity investors buy shares because they expect to receive income distributions and capital gains. The value of equity shares can rise or fall based upon the performance of the company. If the investment generates higher returns, investors may be able to sell their shares and receive the difference between the amount they bought and sold their shares for (capital gains). Similarly, they can also receive the monetary difference if a company’s assets are liquidated and all financial obligations have been met (book value). It is important to note, however, that securities sold through private placements are not publicly traded and, therefore, are less liquid. Additionally, Investors may receive restricted units that may be subject to holding period requirements.
Private investments have the potential to improve the overall health of your portfolio.Because private equity and debt securities are not bought and sold on the stock market as public securities are, they are far less liquid, and as such are inherently riskier. But there is a reason why these investments are often used by institutional investors, endowments and the rich: the power of diversification. Because private investments represent whole new classes of securities for most investors, they represent assets that can be much less correlated than other assets in their portfolio. That means their value may not move in the same direction, at the same time, or in the same amount as your portfolio or the public stock markets. For that reason, it may be possible to actually decrease the overall volatility of your portfolio, and increase its expected return, by including private investments as part of a well-diversified mix of holdings.
What Are The Advantages Of Investing In private equity?
The primary advantage is that investors can potentially increase the value of their equity holdings. Secondly, equity funds have the opportunity to offer investors a unique investment option, especially for initial investment amounts that meet the bare minimum. Through a private equity firm, you get access to a variety of new opportunities i.e. potential investments that you overlook when only looking at public exchanges.
Unlike the stock market, the value of equity holdings in private companies do not fluctuate based on human emotions. Many times, the returns on private equities are aligned with company performance and profitability.
Franchise Debt Investments .
In debt investing, interested investors purchase a company’s debt instead of its stocks. Investing in debt is like giving the issuer a loan. In exchange, the business or franchise will have to pay you principal plus interest per an amortization schedule, allowing the note holder to make income until the note is paid off. You can provide a business with debt capital as a direct loan with a consistent amortization, or by purchasing business issued bonds. The company then makes interest payments to you on a semi-annual basis.
The Advantage of Debt Investing
Debt takes precedence in the capital structure, so in the event that a company goes bankrupt, debt is given priority over equity investors. In most cases, the highest debt level is the secured first mortgage bond that has a right to a certain part of an asset or property, for example, a brand name. If you loan money to a restaurant and receive a lien on the property i.e. real estate, you can take possession of it in the event of the company collapses.
How to Invest
Complete the free registration by clicking on the login/signup button and providing us with your name and email address. Create a profile and once your email address is verified, you will be able to start exploring and investing in our offerings.
Select your Investment
Browse the investment opportunities listed on our site and choose the offering. We perform thorough due diligence and are highly selective in the companies we choose to work with. We vet the management teams of these companies and conduct background checks, due diligence, and other methods required by our group.
Once you have become a registered member of our site, you will have access to the documents related to our offerings, including the Private Placement Memorandum, information regarding the management team(s), along with historical and projected financial information. We recommend your consult with your advisors to determine whether the investment is right for you.
Once you are ready to invest, you will need to be qualified and approved by completing a thorough registration process, which includes accreditation and compliance checks. Once your eligibility is confirmed, you can execute the Subscription Agreement digitally by signing online.
Fund your Investment
Once you transfer your funds from your source bank account, it will be placed in an independent escrow account. A fund administrator will verify your application and then release the funds to the investment.