Choose how you want to use our website:

Cookies help to improve your website experience and provide secure services. Some cookies are essential for security and login functionalities, others enable easier use and convenient support. You can revoke your decision at any time.

Step by step guide to the right investment

How to choose the projects that suite you best

INVESDOR INSIGHTS | 25.03.2022

Step by step guide to the right investment: How to choose the projects that suite you best

If you want to invest your money in a strong project, you are spoiled for choice. A well-founded assessment of a company requires a certain level of expertise. A lot of preparatory work is done by our experts from the Investment Committee. The Campaign Team compiles the most important information for you, which you can find on the companies' project pages.

Ultimately, it's you who decides. Only you know: With what kind of goal in mind do I invest? Am I convinced by the strategy? How do I feel about the company's vision? After all, rational considerations play just as much a role in the decision process as gut feeling. So don't be afraid to make your own judgment.

First decide how you want to receive your return on investment

The general question to clarify is the type of investment. There are two options here: With equity investments you secure chances for a higher return, but at the same time the risk of the investment grows. Another option are fixed-interest investments. They also count as risk investments, but you receive regular interest payments for your invested money in a predefined amount.

With your investment, you are not only securing returns or interest, but above all you are investing in a project. If the project of the company of your choice becomes a success, you will also profit from it. So clarify from the outset: What does the company actually intend to do with my money and do I think its plans are realistic?

First impressions count: Find out about the reason for financing

For a first impression, we attach a short video to most of the products on our platform. Here you can first dive in emotionally. Find out whether you find the company likeable, whether the product attracts your interest and whether you feel like supporting the realization of the idea presented.

Each executive should also be able to tell you in a few words what he plans to do with the money he asks you to invest. A snappy quote at the top of the project page gets to the heart of the funding reason. In case you are already convinced, now it's time for some numbers. - Don't worry: You don't have to go through pages and pages of balance sheets, business plans and market forecasts - we've already done that for you. Without our Investment Committee's critical pre-selection, no project makes it onto our platform.

Don't be afraid of numbers! Take your time to understand the business model in detail

It's a well-known fact that you can talk a lot and plan a lot, but in the end it's actions that count. Numbers tell us a lot about what exactly a company does to earn its money, how the company and its market environment have developed in recent years, and what is to be expected from the future. It is important to understand both the company's business model and the associated market. The focus, of course, is on the product or offering that will be realized thanks to your investment: What exactly is being offered? Is there a demand for this offering? How strong is the competition?

And then there is the financial planning. An idea can be very exciting - but only with a realistic planning of expenses, income and reserves, the idea becomes a product. A realistic financial plan for the company is a prerequisite for receiving back your money, including interest or returns, at the agreed time.

Does the investment structure suit me?

Are you completely convinced by a product? Let's get down to business! Now that you know all the important facts about the company and its product, you can decide whether the specific investment offer is something for you or not.

For fixed-income investments, check out the following factors: Do the interest rate and payment rhythm fit my portfolio planning? What happens to my money in the event of a financial bottleneck of the company (subordinated or non-subordinated loan)? Will I receive the interest payments by bank transfer or as interest in kind, i.e. usually in the form of vouchers?

There is a different logic to investing in shares. Investing in growth companies should be judged on how you see the company doing in the long run. Many growth companies do not pay dividends, but say they will invest in growth in the next few years. Then it is worth paying attention to the development of the company's value and exit strategy, i.e. the possibility to sell shares at a profit in the future.

Anyone opting for a product with participation or profit-sharing rights should check out the following factors: How big is the amount of the basic interest rate? How does the exact structure of the participation work? In the case of convertible bonds, it is also important to clarify different conversion scenarios and conditions.

Diversification is key

With regard to one's own portfolio structure, the magic word is "diversification". If you invest exclusively in products from the same sector, you may incur losses in the event of sector-specific problems. On the other hand, those who diversify increase their chances that a weak performance in one sector will be offset by a better performance in another.

Check the project page and other documents regularly for updates

The project pages of the companies provide information about the most important aspects you need to know in order to evaluate a company. You can find more important information in the linked documents, so you should also pay attention to them. There you will find, for example, detailed information on investment risks. In addition, it is worth taking a regular look at the project page: As a crowdinvesting platform, we regularly receive important information and exciting input from our investors. Inquiries from our investors are answered quickly by us and the companies. Updates are posted on the official project page, additionally we will inform our investors by email.

Written by: Invesdor

Invesdor

Author

DISCLAIMER

The information contained herein is not meant to be, and it shall not be interpreted as investment advice or a recommendation and investors must neither accept any offer for, nor acquire, any securities unless they do so on the basis of the information contained in the applicable investment material of a target company. Investing in securities of unlisted companies is associated with high risk.

Want to read more?

See to article overview