A step-by-step beginner’s guide to investing in the right project

How to choose an investment that suits you best

When it comes to investing in a strong project, the options can seem overwhelming. Making a well-informed decision requires a level of expertise, which is where our team steps in. Our Investment Committee conducts thorough evaluations, while the Campaign Team distills the key information. You can easily access these insights on the project pages of the respective companies.

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.

1. Decide how you want to receive the return on your project 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?

2. Find out the reasoning 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.

3. Take your time to understand the business model

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.

4. Dig deeper into your preferred project investment structure

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.

5. Diversify, diversify, diversify

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.

6. 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.

Read also:
Learn all about how we select your investment opportunities
Fixed interest or equity investments – which type of return are you aiming for?