When you’re ready to pledge your funds to a crowdfund investing campaign, you log onto the online funding portal that supports this particular campaign. Here are the steps you’ll most likely take next:
Register with the portal.
You’ll provide your name and preferred contact information
Take the investor quiz.
This quiz determines whether you’re an educationally accredited investor (translation: you understand what you’re risking by pursuing a crowdfund investment). Don’t stress: The quiz really isn’t very difficult as long as you have realistic expectations about crowdfund investments.
Accept the crowdfund investing portal’s disclosure statements.
Doing so verifies that you understand the risks of investing in startups and small businesses.
Input your checking account, savings account, or debit account number.
A credit card won’t fly when you’re making this type of investment. You can’t use a credit card to buy public stock on an online brokerage account, and you aren’t allowed to use a credit card to make crowdfund investments either.
Specify how much you intend to invest.
The amount you choose must be above the minimum established by the campaign and below your maximum allowed by the JOB Act. Where you fall in the middle of those two numbers is up to you, your financial portfolio, and your investment advisor (if you have one).
Start signing.
Buying crowdfund investments isn’t as easy as simply hitting the purchase button. There will also be documents like a subscription agreement, which summarize and standardize the offering. In other words, you’re buying a certain number of shares at a certain price and those shares come with specific rights. You’ll need to review and sign these documents.