Investors Knowledge Base

How does equity crowdfunding differ from the stock market?

Companies offering equity through crowdfunding are usually small Startups that may have limited or no track record and little profits, if any. These investments are considered high risk, but they can offer the potential for high rewards if the Startup succeeds. People who find and invest in the next “unicorn” may realize significant gains. 

By contrast, companies listed on the stock exchange have a more established track record, corporate structure and financial records. In a typical market, many public stocks are not considered high risk, but the potential for a big upswing in equity value is more limited. More.