Data shows that there is an appetite to invest in small and early-stage businesses.
Here are a few interesting stats around high-net-worth individuals and where they like to invest.
According to a survey by UBS Investor Watch, nearly 70% of investors with $1 million or more in investable assets say they would like to invest directly in private equity and other alternative investments. This suggests a significant appetite for private investments among high-net-worth individuals.
The Angel Capital Association (ACA) reports that the median investment size for angel investors in the United States is around $25,000. This suggests that many angel investors have less than $3,000,000 to invest and are looking for smaller investment opportunities.
The Small Business Administration (SBA) reports that over 96,000 small business loans were made in the fiscal year 2020 through the agency’s 7(a) loan program, which is designed to help small businesses access capital. The average loan size was around $531,000, which suggests that many small business investors are looking for relatively small investment opportunities.
The crowdfunding industry has seen significant growth in recent years, with platforms like Kickstarter, Indiegogo, and GoFundMe helping entrepreneurs and small businesses raise millions of dollars from small investors. According to a report by Crowdfunding Insider, the global crowdfunding market was valued at around $13.9 billion in 2020.
What do you find is the biggest challenge when investing in smaller, early-stage ventures? Let me know in the comments.
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