Investing in an unlisted company has specific characteristics:
- A high potential for economic return, but also a high potential for risk if you do not create a diversified portfolio across multiple sectors
- It is medium to long term: some companies need time to acquire enough stability on the market to allow them to be acquired and/or to be listed on the stock exchange.
- It is illiquid: the lack of a secondary market where to buy and sell the shares makes the sale of the single shares complex, entrusting their liquidation to medium-long term methods, such as the company exit or the stock exchange listing.
The quotas are freely transferable through 3 modalities:
-Sale: to date there is no secondary market for the sale of the quotas, this makes it difficult to do it independently as the search for the buyer and the involvement of a notary are borne by the investor. The situation changes if (where available) the investment has been made with Rubrication service.
-Exit of the company: the acquisition of the company by an interested party, resulting in the liquidation of all shares in the company.
The shareholders can take advantage of the right to sell their share at the same conditions negotiated by the majority shareholders (so-called right of co-sale); this allows them to exploit a bargaining power that otherwise the minority shareholder could not have and to obtain the highest possible sale price, maximizing their profit.
-Listing on the stock exchange: the possibility that the company is listed on a stock exchange (the so-called 'IPO'). In this case the shares held become shares and can be freely traded on the stock market.
In order to reduce risks and maximize the potential for economic return we can:
1. Invest in selected companies
2. Create a diversified portfolio
Selection is a fundamental activity to find the most promising companies to bet on: this is Mamacrowd's task.
The selection is carried out by a team of professionals who aim to conduct equity crowdfunding campaigns only with companies that allow to reduce the risks of investment, evaluating all the elements of the project: product, capacity and composition of the team, market potential, validations obtained from the market, involvement of institutional investors or prestigious supporters, presence of patents, scalability of the business, etc..
Diversification is the distribution of the capital that we have decided to invest on several projects, belonging to different sectors, rather than only on one.
Diversification allows us to distribute the risk, taking into account that a part of our portfolio of companies may not generate income.
Even a few success stories are enough to generate a significant economic return on our investments as a whole, thanks to the exponential growth in the value of the shares of certain companies.
The proposal of Mamacrowd, articulated between startups, SMEs and real estate, allows to diversify both for the life stage of the companies and for the business areas, very important details for a well built investment portfolio.
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