Motley Fool analyst Dylan Lewis interviewed Indiegogo founder Slava Rubin and MicroVentures founder Bill Clark about the difference between crowdfunding and traditional equity investing.
the main difference is the liquidity of investment in a private company.
In other words,
when you invest in Apple, a day later, you could sell your stock on the same day and get liquidity.
With regard to equity crowdfunded companies,
you can’t get liquidity for a while. It could be seven to 10 years, sometimes. We’re also doing revenue share opportunities where you can get your money back sooner, assuming that the company is successful. And then, in the private market, early stage start-ups are risky. Seven out of 10 are going to fail, and you need to diversify.
(Via: The Mootley Fool)