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By Sean Krainert
Takeaways:
- Tech-enabled investment platforms help individuals and businesses invest with independence and efficiency.
- New platforms exist for angel investing, real estate investing and public equity investing.
- Cutting out middlemen and increasing transparency is a tech tactic across types of investment.
Technology touches all corners of society, evolving through advancements that simplify processes and engage future-thinking. Technology today is dictating the future of every sector, inspiring innovations that are propelling the world forward.
The investment platform has proven to be the ideal arena for technology-enabled functionality to flourish through more user-friendly investing opportunities. A process that was previously accessed only manually, at a high cost, is becoming accessible to the masses through new highly tech-enabled platforms where individuals and businesses can invest with more independence and efficiency.
Angel investing: CircleUp and AngelList
Angel investing has become one of the most popular ways to invest for entrepreneurs who want to go beyond a simple pecuniary profit. Appealing to a wide audience, it promotes a relationship between the investor and investee that reaches beyond traditional attributes of the process.
Business angels are often seeking out tech-enabled platforms to support this unique relationship and connect them to startups looking for both financial investment as well as mentors willing to use their experience and networks to help them build their company. Sites like CircleUp and AngelList do just that.
CircleUp is a platform that connects startup entrepreneurs with investors who are enthusiastic about innovative products and retail companies. It has been able to streamline a transparent process that promotes the relationship between investors and businesses using efficient tech-enabled features that are free of charge for the investor.
The site provides a portfolio of privately held companies providing a unique diversification opportunity for investors beyond public market investing.
CircleUp is focused on nurturing the relationships between startups with a promising potential that deserve funding from passionate investors. And with a technology-enabled layout, they make it easy for accredited investors to unearth, assess and invest in companies with ease.
AngelList is another platform where investors can not only invest in startups utilizing a tech-enabled process, but where they can also take advantage of unique options to do so. Syndicates allow investors to join forces with already established angel investors who have formed a consortium that the investor can then co-invest in.
The Select Fund also promotes diversification through the option of putting capital into a group of 100 startups across multiple sectors instead of having to choose only one. AngelList invites investors to fully utilize their online platform for every step of their investment with features they specifically designed to support their independence.
Real estate investing: RealtyShares and REIT
Buying real estate has evolved over the years from the goal of owning a home to investing in property for financial gain. The trend of real estate investing has become mainstream for investors and is opening up to an even wider audience with new tech-enabled platforms.
With a process that is known to be daunting, these new and uniquely structured procedures are proving user-friendly for all aspiring real estate investors.
RealtyShares is an online investment platform that uses technology to connect investors with private real estate investments. With a crowdfunding foundation, they provide an arena where accredited investors can securely browse their marketplace of prescreened residential, commercial, retail and mixed-use properties.
Crowdfunding is allowing them to open up real estate investment to a new demographic of investors that was previously accessible only to an exclusive group. Investors using RealtyShares are able to utilize the secure site for every step of their investment including a live dashboard for monitoring and making decisions.
Real estate investment trusts (REITs) are another way for investors to take part in real estate investing through specifically designed technology that makes the process manageable.
REITs provide investors the opportunity to invest in real estate without having to actually go out and buy or finance property. Instead, individuals can own or finance income-producing real estate through investing in stock-exchanged REITs. Similar to the process of buying stock to invest in industries, shareholders can buy shares in REITs and earn a part of the income produced through the investment.
With the process of buying REITs available online, investors are offered the same level of control and ease as they would have in buying stock.
Public equity investments streamlined by technology: Robinhood and LOYAL3
Public equity investments are one of the most accessed investment avenues by far. It is easily understood with a high level of visibility, and also easy to execute.
But with this type of investment becoming even more widespread, the investment platforms associated with it have had to reach to another level in order to attract investors. Robinhood and LOYAL3 have surpassed the traditional public equity investment competitors by taking trading to another level by offering access to free trading.
Robinhood is dedicated to creating simplicity in investing for all entrepreneurs. It is a stock brokerage allowing individuals to buy and sell U.S.-listed stocks with zero fees attached, broadening the playing field and allowing more people access to financial markets.
With a goal of inspiring a new generation of investors, the company was built to be as efficient as possible. By removing a large amount of the human touch points that turn off most young investors, it has been able to focus on a technology-driven brokerage process engineered with the investor in mind.
LOYAL3 is also pushing barriers to make buying and trading stocks more affordable for the investor. With this strategy, the platform is also encouraging a new market of people to become investors, waiving all fees that others are charging for the same investments.
One way it is able to offer a no-fee platform is by batch trading, which combines trade orders from multiple investors to be completed once daily, yielding fewer market interactions, and lower costs. LOYAL3 has embraced the idea of simplifying the investing process by cutting out the middleman and supplying an affordable, tech-enabled platform.
