Crowdinvesting is a popular tool in the world to raise capital or funds for a new project.

Crowdinvesting got its name from two words: "crowd" and "investing". This means that crowd investing is a "collective investment".

Crowdinvesting is when many investors fund a project, each making a small financial contribution in proportion to the total capital required. Over time, the investor receives the amount contributed, plus attractive interest.

Crowd investing is a relatively new, but rapidly growing concept.

Crowdinvesting gives people the opportunity to invest small amounts of money in a private company in exchange for shares or a percentage of ownership.

Crowdinvesting is the practice of funding a project or venture by raising small amounts of money from a large number of people, typically via the internet.

Crowdinvesting allows a young company in its development phase to raise funds from a large number of people, the so-called micro-investors, who invest small amounts of money.

And for the investors, it gives everyone - even people with minimal financial means - the opportunity to participate in the project and make a super profit at the same time!

Once you understand the principles of crowd investing, you will see new opportunities and are guaranteed to earn your first big capital!

This information will be incredibly useful for those who have a highly profitable project and want to invest in it, but do not know where to start.

Invest wisely!

The Basic Definition of Crowdinvesting

Crowdinvesting, also known as equity crowdfunding or investment crowdfunding, is a revolutionary form of financing that allows a large number of individuals (the "crowd") to invest relatively small amounts of money in private companies, startups, or projects in exchange for equity (shares), debt (loans with interest), or other financial securities like revenue-sharing notes. It connects entrepreneurs directly with a broad pool of potential investors, thereby democratising access to investment opportunities that were traditionally reserved for venture capitalists, angel investors, and financial institutions.

Crowdinvesting represents a specific type of crowdfunding where participants provide capital in exchange for equity, profit-sharing rights, or other financial instruments. Crowdinvesting is distinct from donation-based or reward-based crowdfunding in that it focuses on ownership and financial participation. Investors should be aware that they are not merely supporters; they become shareholders or stakeholders in the venture they fund.

Investment from the Crowd: Individuals expressing interest are invited to peruse the details of the investment opportunity, with the option to invest a minimum of €100 or £10, depending on the prevailing legal framework. Investments are typically consolidated through a special purpose vehicle (SPV) or retained as direct holdings. Investors become shareholders or creditors. They may receive updates, annual reports, and potentially dividends. The long-term goal is an "exit event," such as the company being acquired, going public (IPO), or buying back shares, at which point investors may realise a return.

Crowdinvesting vs. Traditional Investing: In contrast with traditional stock market investing, crowdinvesting specialises in earlier-stage ventures, which generally carry higher risk but potentially higher reward. This system facilitates access to private markets for individuals. This development enables individuals to participate in opportunities that were previously exclusive to wealthy or institutional investors.

Legal and Regulatory Considerations

Crowdinvesting is heavily regulated to protect investors. The regulatory framework pertaining to the subject varies across different national jurisdictions. However, in general terms, such entities are subject to a stringent regulatory environment with the primary aim of safeguarding investors.

Key regulations include:

Investment Caps: There are limits on the amount that a non-professional investor is permitted to invest across all crowdinvesting platforms in a given year ((For example, in the European Union, these limits are determined by net worth and income).

Transparency Requirements: Companies must provide a detailed investment prospectus or offering document with standardized risk warnings.

Types of Crowdinvesting

There are three types of crowdinvesting: royalty, public lending and equity-based crowdinvesting.

Royalties are rewards in the form of a share of the profits generated by the funded project. Most commonly found in the world of arts and entertainment. To finance film production, song recording, application development or computer games. The investor not only receives income, but also becomes a co-owner of the intellectual or creative property of the project. The amount of royalties paid depends on the amount of money invested.

CrowdLending (also called People's lending) – This is the most popular form of collective investment today.

The main advantage of crowdfunding is that all investors receive a detailed payment schedule and an exact return on investment. Another advantage is the open access to information about the profitability of the project and possible risks.

Equity-based crowdinvesting is the most advanced and popular form of crowdinvesting in the world!

In return for their contribution, investors receive shares in the company in which they invest, the right to receive dividends and the right to vote at general meetings. The shares can be either ordinary or preference shares.

It is this Crowdinvesting model that is used to promote the highly profitable Gem Space super App brand.

With Gem Space Investment project from TreeD Investment Fund, investors can invest amounts as low as €172.

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