Crowdfunding: investment with risks


Berlin – Crowdfunding allows investors to participate in large projects. An entrance is possible with individual offers already starting from 10 euro. It should be up to nine percent return in it. But a survey “financial test” of a total of 22 crowdfunding platforms shows: The risks are great.

Picture: Yield 

The reason: investors participate in platforms or companies, they usually have no say and bind their money often for years, reports “financial test”. What returns are uncertain. It depends on how the company is established in the market. In the worst case, the mission is lost. Investors should therefore think carefully about which idea or project they entrust their money to. What matters:

– Return: Swarm financing is popular with real estate projects.

Providers are forecasting between 5 and 7 percent annual returns. Interested parties should, however, pay attention to which property the money is used. Basically, the higher the risk, the higher the promised return.

– Experience: Making a lot of money with a sparkling idea – that’s what start-ups promise. Various platforms allow participation in projects in sectors such as medical technology or food. Here investors should look especially at the business model. There are high risks for newly founded companies with inexperienced founders.

– Conditions: Yield investors can also earn returns on energy projects. These platforms can be used to invest in either new projects, improvements to existing facilities or energy-saving measures. Important here: If there is no feed-in tariff, it depends on the solvency of the contracting party.