I’ve always been intrigued by these investor reality shows, like Dragons Den. Where entrepreneurs pitch their business ideas to a panel of venture capitalists in the hope of securing investment finance from them. However, from the investor angle, I really don’t have that much capital to invest.
But what if you could invest in a high tech project for as little as 100 Euros?
All funds that you have in your bank account are affected by inflation. It’s an obvious fact, which means that the real value of your money is constantly decreasing. People, who are not investing their money are actually losing it year by year.
There are many investment vehicles to beat inflation, one of which is peer to peer lending. I enjoy peer to peer as an investment. However, I feel I’m nothing more than a glorified loan shark. Am I as ruthless as these payday loan companies you see on TV?
Probably not. I’m helping folk buy their first home, upgrade their car or start a small business. So, I’m fine with that and the double-digit ROI and buyback guarantee seals it for me.
However, on a higher note and with crowdinvesting, I can deploy my cash into new startups and high-tech. Such as renewable energy, power plants, and crypto mining farms. I can become an Angel investor on a much smaller scale.
What is Crowdinvesting?
Crowdinvesting is somewhat more specific than ordinary crowdfunding as it is related to funding business ventures, newly established or already existing companies with a straightforward purpose of earning interest on invested funds. A certain number of investors join a pool to complete the announced need for a project or company for a specific type of funding.
Initially, such investments were possible only for professional investment companies and individuals called business angels (for example, the investors in Dragons Den), who could invest significant amounts in start-ups or other ventures with high potential, which brought them great returns.
Indeed, it required big capital under control and high level of business networking and financial proficiency.
But nowadays you don’t need to be a high-worth individual or finance professional to become a co-investor in a major project in your country or abroad. Now that platforms like Envestio have entered the market. We’re living in incredible times.
These platforms are now set up with the ordinary, everyday investor in mind.
Most crowdinvesting platforms allow their participants to start investing from very small amounts, such as 50 or 100 EUR. Ordinary people can now receive a great alternative to traditional bank deposits, which are noticeably less flexible and profitable than investments made through crowdfunding platforms.
Who Are Envestio?
Envestio is headquartered in Estonia and is now one of the leading companies in the industry of “New Finance” or “Finance 2.0”.
They are a modern crowdinvesting platform that offers investors premium investment opportunities, through the online marketplace.
These are investment projects, which successfully passed a thorough and unbiased due diligence process, conducted by their professional team.
Envestio has already pre-analysed all investment opportunities offered on the platform. In fact, only a very small % of companies applying for a financing round on Envestio are accepted and presented further to Envestio participants.
Their online marketplace gives you secure, easy and instant access to unique and alternative investment opportunities. You can complete and diversify your own investment portfolio, starting with EUR 100 minimum investment in a single project.
You can reinvest profits from successful investments in new projects, etc. As a result, your portfolio will become broadly diversified over time.
At the moment, entry to all investments/ individual projects is carried out manually. They plan to introduce more advanced features, such as auto invest and a mobile app in the near future.
They are also currently analyzing more than 10 new projects from new investment owners, which will be presented on the platform in Summer 2018.
Investor Related Questions
These are some key questions from investors, before committing their hard earned cash towards crowdinvesting in Envestio (taken from Envestio’s website):
1. How are you capable of sustaining such a high yield on your investments, it’s one of the highest yields in the market?
“As it has been previously mentioned, Envestio works in the field of providing bridge
financing/equity replacement loans, which constitute a relatively small portion of the total financing, attracted to the specific project, so total interest rate burden for the project is much lower than Envestio’s rate. We do not completely finance big projects at the current stage of operations.
Another option is a short-term addition to working capital, which allows completion of an
additional business cycle resulting in high incremental profit, bearing in mind that fixed costs of the company still remain the same.
2. Do you offer any buyback guarantees with the projects for investors?
“No, but we have an investment principal repurchase guarantee instead, which means that the investor is able to sell back his or her investment to Envestio at any moment, before the project is closed (usually at 5% cost). We finance business ventures only, so buyback guarantee in a form offered by regular p2p lending platforms is not possible in our case.
Nevertheless, there might be some changes in this procedure after mortgage-backed loans are
launched at Envestio platform.”
3. You had any projects default in all these years?
“No, the default rate is 0%. All Envestio participants, who invested in the published investment projects got back investment principal + earned interest in full.”
How to Invest in Crowdinvesting?
I could waffle on, but there’s nothing quite like having skin in the game. Hence, I provide my Envestio review below:
- First of all, you need to register. You can do this by clicking the link above.
- Then load up your account. After logging in, click on ‘My Accounts’ tab on the top nav bar, then click on that big blue ‘Add funds’ button.
They don’t accept bank cards yet, but you can perform a simple wire transfer. I made the transfer on a Wednesday evening, and by Thursday morning, I received an email notifying me my account was topped up.
3. Next, scope out the active projects, by clicking on ‘projects’ on the top nav bar.
As you can see, there’s an array of unique industries. From Power plant developments to organic street markets. For example, let’s run through the ‘urban mining’ project I invested in.
Here are the loan details for the urban mining project:
And the loan information:
Finally, the payment schedule:
Once you’re happy with the project at hand, and all the terms…add your desired amount and click, the blue ‘Invest’ button. I’m being super cautious at this stage, hence only investing the bare minimum i.e. 100 Euros.
The investment details screen will then appear, as below:
I also chose 3 other industries/ projects. These were a cryptocurrency farm, power plant development and the organic street market in Riga. You can grab an overview of all your projects, by clicking the ‘Investments’ tab in the top nav bar.
Finally, you can view your account balance/ number of investments, by clicking ‘Dashboard’:
For further updates on how this crowdinvesting account is performing, please keep an eye on my quarterly passive income reports (from Q2, 2018 onwards). They are filed under the ‘Investments’ tab on my top nav bar
Do You Want The Chance to Earn 22% ROI (Plus a Bonus)?
If you sign up using my link, we’ll both earn a little commission. And of course, all going well, a handsome return from each project.
Making investments in premium investment projects at Envestio offers great opportunities, but these investments still are risky as any other. In the worst case, the entire investment, including principal and interest amount may be lost. At the same time, Envestio participants are under no obligation to continue funding the problematic project.
Ordinary joes can now invest in young, growing companies with huge ambitions. They can gain the ability to participate fully in the new, entrepreneurial economy in this time of unprecedented disruption.
Estonia, a once struggling ex-Soviet State is now a future star. With the invention of Skype and innovation of Finance 2.0, this country (and the Baltics in general) is a Fintech powerhouse.
Unlike the Dragons and dividend growth investors, there is some downside to this model. You will never own a stake in the company. However, with generous double-digit returns, over a relatively short timescale, there really is potential to grow your cash quickly (with some unique, exciting businesses).
I don’t fully advocate the crypto scene either. However, I believe blockchain is the future (or maybe even the present) and will ensure data/transactions are more secure, efficient, and trustworthy.
It’s early days before I can make my mind up on this crowdinvesting platform, but it ticks all the right boxes so far…
Now I would like to hear from you in the comments
What’s your experience with crowdinvesting up to now?
What proportion of your portfolio is made up of this type of investment?