Overview

This video gives a great rundown of what you get when you invest in a company via Equivesto. Shares? Partial Ownership? Equity? This video explains all that.

Transcript

Hey there, Riley from Equivesto here! 

This is now a good time to give you a brief overview of what partial ownership means.  Companies issue shares for both themselves and investors.  A good way to visualize shares would be to imagine each share as a teeny tiny piece of a giant pie.  However, this pie is an ever-growing pie  - as time goes on, it keeps getting larger and larger so that more people can have a piece of the pie. Companies make their pies bigger by issuing more shares whenever they want! This leads to what is known as share dilution.  Dilution just means that whatever an individual initially owned as a percentage of a company will go down because there are more shares to include in a 100% valuation. 

By people like you investing in start-ups and small businesses on Equivesto, you are getting shares of a company.  If the shares go up and down over time, the value of your piece of the company - - or your essential payout - - goes up and down.  This is normal; it happens in the stock market and everywhere else for that matter.  Sometimes in investing, it is recommended that people are prepared to leave their money in for a long time.  And with investing in volatile start-ups - - this is a must! You need to give your preferred companies a chance to grow and develop their value.  So keep in mind that if you invest, it will not be a quick pay day by any means - - you are taking the long-haul plunge.  The good news is that because the minimum investment is only $100, you can take this plunge without worrying as much about the results.  

Let’s spend a bit of time talking about what types of shares you can get from start-ups and small businesses on Equivesto.  These shares aren’t like investing in the stock market where you can just turn around and re-sell your shares.  These shares will be yours until the company is sold or until a special event takes place. When will that happen? Companies list their goals as part of the campaign, although nothing is certain.  When it does happen, the company will notify you directly.  With Equivesto, for the most part, there are two common types of shares: Common Shares and Preferred Shares.  

Common shares are your standard, basic shares.  Common shares can have voting rights or not, but many companies on Equivesto offer non-voting common shares.  Non-voting just means that you have partial ownership of this company, but you can’t tell them how to run their company - - You’re just along for the ride! These shares can be paid out when the company is sold or when the company decides to give out potential dividends.  Dividends are when a company has leftover profits and chooses to divide them equally amongst their investors. 

Preferred shares also typically come with no voting rights but the difference here is that there is a guarantee of dividends.  The company will probably say something along the lines of, “We promise to pay you a dividend of X percent every year until the company is sold or until we buy back the shares.” Preferred shares are sometimes issued with a specific buy-back date.  

And that’s that on partial ownership!