Equity crowdfunding, where investors (accredited only for the moment) buy securities in privately owned companies, is still relatively new. The increasing appeal of investing in startups is understable for investors who are looking to diversify their portfolio, looking to get uncorrelated returns and have determined that their risk appetite is aggressive. However, there have been a number of claims about equity crowdfunding that I felt compelled to surface and address. Having been in the space since 2011, here are the top three misconceptions:
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