investing

5 alternative investments for fat returns

Funding the next hot startup
Funding the next hot startup

Angel investors, or individual investors in infant companies, used to plunk down $50,000 or more in a startup firm.

Now, microinvesting, where lots of small investors take equity positions in fledgling companies, has changed the game. For example, at MicroVentures people can invest a minimum of $3,000 and get an equity stake in a startup.

MicroVentures does the due diligence by performing background checks, assessing competition and vetting business plans. A private placement memo that details the company's business and its risks is then given to investors.

But there is plenty of risk. "Seeing a return could take five to seven years," says MicroVentures founder and president Bill Clark. "And you could also lose all your money. It's high-risk."

Additionally, only about 2 out of 10 companies will become profitable, he says. So far, MicroVentures has helped companies raise over $40 million. And like lots of other high-risk ventures, the payoff can be big -- as much as 10 times your original investment.

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