Invest In Businesses Online

Invest In Businesses Online and Share The Revenue 2022

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Invest In Businesses Online

There are a variety of ways a person can invest in a business while online. From offering digital expertise to contributing funds through a digital platform, there’s really an option for every type of investor. For those who fall in the latter category, you’re in luck because there are plenty of digital sites that allow you to browse small businesses and contribute money to the places you feel passionate about.

Mainvest is a good example of an online investing website catering toward small business success. It’s free to join Mainvest and anyone is eligible to invest on the site as long as they’re over the age of 18. These platforms take investing in small businesses online to a new level.

In this article, we’ll explain why you should invest in small businesses online, how to get started in doing so, where to go to get started, and any other burning question you have about investing in businesses online.

Why Should You Invest in Small Businesses Online?

The internet may be a broad and ever-expanding space, but that doesn’t mean small businesses need to get lost in the chaos. If you care at all about your local economy and you want to see your neighbors reach success, investing in small businesses is an incredibly effective first step.

Not only do financial investors help small business owners reach financial freedom and success sooner, but smart investments also help your portfolio grow as you learn to invest more as time goes on.

In short, if you like to see the little guy win, you should definitely be investing in small businesses in and around your community.

How to Invest in Businesses Online

There are several different ways to invest in businesses online. However, the most common form of investment is through finance. When financially investing in a business, you can do so for one of two types: debt or equity. 

To invest in businesses for equity, you’re buying an ownership stake. An equity investor will provide capital and will receive a portion of the profits or losses from the business they chose to invest in.

On the other hand, debt investment consists of an investor who provides a monetary loan under the expectation that interest income will be paid, along with the eventual repayment of said loan. This type of investment typically has a leg up from equity investors as debt investors are more likely to receive their money back before equity investors if a business goes south.

How To Invest In Businesses

Where to Invest in Small Businesses Online

Although there are plenty of websites that offer small businesses the opportunity to be seen by investors, there’s one in particular that we’d like to highlight here: Mainvest.

Mainvest is an investment website where small businesses can post a need for investors and those who are looking to invest in small businesses online can scroll through and support those they connect with.

With as little as $100 down as an investment, investors can join a community of others like them who typically see 10-25% of target returns on investment. Each business that is accepted into the Mainvest database is scrutinized and vetted before being listed for investors to see.

This is helpful in that you’re far less likely to lose out on your investment if you’re only being exposed to legitimate and ethical businesses. In fact, only 5% of businesses that apply to be on the Mainvest platform actually get accepted to raise.

With that said, investing is still a risky business. You should never invest more than you can afford to lose at once.

Online Small Business Investment FAQs

If you are looking to invest in new businesses, you may have some questions.

What’s the difference between Kickstarter and Mainvest?

While Kickstarter is meant for “backers” who help a business get off the ground with the promise of prizes and special incentives, Mainvest is a more traditional investment approach. When you invest in a business through Mainvest, you’re offered several different kinds of investment securities. In most cases, you’ll be able to choose from equity or debt security.

What’s the difference between Mainvest and the Stock Market?

Although both Mainvest and the general stock market are similar in that you’re investing in a business, there are plenty more things that make them differ from each other. For starters, Mainvest focuses mainly on small businesses that may not be available on the stock market. This makes them a higher risk profile in terms of investment.

Along with that, businesses that are listed on the stock market have to go through SEC vetting while Mainvest businesses only go through a simple (although difficult to be accepted from) application process.

Stock market businesses also tend to have more workers and resources available at their disposal. However, the businesses listed on Mainvest tend to be run mostly, or solely, by their founders.

How risky is it to invest in businesses for equity?

The investment game, in general, is pretty risky. With equity investing, in particular, you’re the most vulnerable. On the off chance that your business investment goes south, that business will be required to pay back any debt investors first before they can give you your money back. 

This is especially the case with small businesses. Although small businesses are the epicenter of a local economy, they commonly have a difficult time competing with big box store competition. This makes them a higher risk for going out of business.

What exactly do you own in a business if you’re an investor?

When you’re an investor in a business, you typically own a share or some type of security. Depending on the issuer of the security you may have equity or debt security. These play a major role in how much you can make as an investor when you invest in a particular business.

Because there are so many different kinds of investment securities, it’s important to make sure you thoroughly review any contract or deal before officially investing in any business.

Can anyone invest in a start-up?

Anyone over the age of 18 and in the possession of their own bank account can invest in a start-up business. However, it’s important to maintain your smarts in doing so to avoid over-investing and losing money as a result. 

Where else can I invest my money?

Websites like Betterment offer all types of investment options like stocks, 401(k), crypto, and socially responsible investing. Betterment is one of the best investing platforms around with low fees, so definitely check them out.

Wrap Up

Investing in businesses is easy with platforms like Mainvest. Only 5% of the businesses that apply on the Mainvest site are accepted so you are getting pre-vetted businesses with a higher likelihood of great returns on your investment.

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