Crowdfunding is booming in America, thanks to JOBS Act and Title 3. But it isn’t booming fast enough, and there is a lot of room to grow. For instance, barely one-third of all Millennials invest.
On the other hand, research indicates potential growth areas for crowdfunding include Impact Investing— i.e., investing in companies that bring about positive change in the world, which would be primarily led by socially conscious Millennials.
Newchip, a new Austin startup is trying to capitalize on that possibility by acting as a catalyst of millennial investment.
The site is designed to be a marketplace for hundreds of private equity investment opportunities where “non-accredited investors” (you and me, and all the broke friends we know) can invest in low financial sums (minimum of $100) over a specified period.
Title III, passed in 2016, empowered non-accredited investors to get into the equity crowdfunding game.
Whereas previously investments were only allowed for investors who made $200,000+ or have $1 million in their coffers, now anyone with some disposable income can have skin in the game.
But Millenials show an unusual lack of interest. A major reason is shortage of cash. Parting with dough to reap future benefits is hard when paychecks are overstretched to cover monthly payments.
Ignorance also plays a role
“Many millennials don’t know what a 401(k) is; they’re hazy on the difference between individual stocks and mutual funds,” said Mary Beth Storjohann of Workable Wealth to Bankrate.
Keeping these barriers to entry in mind, Newchip has come up with a new modus operandi: simplify the investment process— give clear choices of how much, where, and when to invest; and give them a reason to invest—show commitment to social causes and environmental causes.
You can make your picks from three types of investment— Startups (stocks); Property (real estate); or Lending.
Their SmartMatch feature helps you narrow in on your area of interest, and invest in accordance to your values. Investing in startups from completely different sectors also makes it easy to diversify your portfolio.
Newchip platform shall include startups like Legion M, the media company, Swiftmile (solar-powered bike-sharing program for office goers) and NORX (same day prescription delivery app).
It is not clear when the app and the site will be fully operational; for now it seems they are preparing for a mega launch soon.
The app promises to make investment easy and attractive for the young busy kids out there. Co-founder Ryan Ràfols said it is the Tinder for investment.
But do make sure you swipe yes to the right startups! Unlike a date, it might be harder to get out of.