Navigating the Risks of ECF
Investing in equity crowdfunding (ECF) can offer high potential returns, but like any investment, it also carries inherent risks. Understanding these risks is essential for making informed investment decisions.
Is Equity Crowdfunding risky?
Yes, investing in Equity Crowdfunding carries a certain degree of risk. It's important to remember to invest only what you can afford to lose. Early-stage startups are particularly risky investments, as there is a chance that you may lose your entire investment. However, this risk is matched by the potential for significant returns, as the valuation of growing companies can increase dramatically.
How are investment risks managed or reduced?
In order to manage investment risks, pitchIN undertakes various measures such as conducting due diligence and background checks on issuers before launching campaigns. We also have our own screening process for companies seeking to be issuers, although this does not guarantee investment viability. Furthermore, pitchIN strictly handles and directs investor funds to a registered trust account before disbursing them to the issuer.
We closely monitor all campaigns to ensure the highest standards and take responsibility for fair and accurate statements as such:
How risky are startups and small businesses?
Investments made through pitchIN carry a high degree of risk, as compared to publicly listed companies in Bursa Malaysia. As an investor, it is crucial to carefully evaluate all factors before committing to an investment. Only invest what you can afford to lose, without jeopardizing your lifestyle or retirement planning.
How can I reduce the risk?
Making investments that you are passionate about and understand well is a wise move. When investing in Equity Crowdfunding, diversifying your portfolio by investing in different industries and companies can help mitigate risks. However, it is important to keep in mind that predicting returns in early-stage startups and small businesses can be challenging. As an investor, it is essential to invest in something that you find valuable and promising.
How many investments should I make?
Investing all your money at once is not recommended. It is better to invest in batches. For example, making ten RM500 investments instead of a single RM5000 investment if you plan to invest RM5000 per year in startups and small businesses. You can invest as much as you can afford, but you should never invest more than you can afford to lose. For more information, please view investment requirements and limitations.