As with any investment, returns are not guaranteed but here are four of the more commonly known ways for equity crowdfunding investors to make money from equity crowdfunding.
- Share buyback
Some issuers may offer a buyback option at a certain target price within a predetermined time frame. This allows investors an opportunity to exit their investments and earn their returns.
When the company is going public, investors have the option to exit their investment by selling their shares at a market-determined share price and enjoy the benefits of capital appreciation due to higher valuation at the time of IPO.
- Mergers and acquisitions
When either of these occurs, investors are presented with the opportunity to sell their shares at a higher price and exit the investment.
Investors are entitled to earn dividends per annum should the company they invest in hits its projected net profit based on its projected financials for the year.
The targeted dividend payout ratio varies from one issuer to another and it will be stated on the respective campaign page.