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It’s no challenge to find investment opportunities in public stocks. Unfortunately, public companies are generally rather large, which means investing in them can come with a pretty hefty price tag. If you’re looking to invest in businesses independently, these companies may be beyond your personal reach. So, how does one break into this asset class?
Mainvest was created with the goal of making this type of investment more accessible to the everyday investor, while also funneling cash into the small, local businesses that bring life to communities across the country—and often need financial help the most. If you’re looking to invest in small businesses, but don’t have the capital to take on a big investment, this crowdsourcing platform might be the one for you. Read on to learn all the ins and outs of Mainvest and determine whether it meets your personal criteria.
What is Mainvest?
Founded in 2018 by Benjamin Blieden, Nicholas Mathews, and Felix Le Dem, Mainvest was created with the goal of connecting investors looking for passive income with owners of small to medium-sized businesses in need of capital. They wanted to create a win-win business model that allowed business owners and investors to feel like they’d come out on top.
With Mainvest, small business owners—including those that have historically been passed over, like women and minorities—get the funds they need to grow, while investors can diversify their portfolios by investing as little as $100 and quickly yield returns targeted at 10% to 25%.
Rather than allowing big banks, realty developers, and e-commerce powerhouses to control which businesses thrive in a community, Mainvest empowers community members to pool resources and decide which entrepreneurs receive the capital they need by funding them themselves. By making it easy and accessible to invest in small businesses, community members can take control of their towns—and reap the financial rewards of their work to help local businesses flourish.
Since its establishment, Mainvest has allowed investors to funnel over $15 million into over 450 small businesses, and 96% of businesses have been able to repay their debt investment on time.
What is the key focus of Mainvest?
What stands out in Mainvest’s mission statement is the value-driven nature of the platform. Rather than purely proposing small business investing as a portfolio diversification strategy, Mainvest highlights ambition, community, and social equity as core values of their company.
They remind us of the powerful cultural shifts that can come from using investment funds to drive change in local communities. They remind us that investing this way creates jobs, generates wealth on both sides of the investment, and strengthens both the community and society as a whole. They also include transparency as a core value—investors on this platform should expect clearly outlined terms, agreements, and risks for any investment.
Get started with alternative investing
Platform | Minimum Investment | Investments | Pros | Link |
 | $500 | American franchise businesses | Investment returns and passive income | |
 | $100 | Hedge fund investments | Open to non-accredited investors | |
 | $2,500 | Multiple investment classes like art | High annual return over 9% |
Mainvest features
In order to truly get a sense of a platform you’re considering investing with, one of the most important things to consider is what features they offer that make them stand out. Based on our review of Mainvest, here are some of the top features you’ll love:
- Accessible platform: On Mainvest, both accredited and non-accredited investors are welcome to participate. This means it’s a great platform to break into investing with, as you won’t need to meet SEC accreditation requirements in order to get started.
- Low minimum investment and no investor fees: Another thing that makes this platform so great is its low minimum investment requirements. Although some investments specify a higher minimum, you can get started on Mainvest with just $100. Since private equities usually come with a much higher minimum investment requirement, the low barrier to entry here makes it a great jumping-off point for newcomers. And best of all? No fees for investors.
- High target returns: With Mainvest, you make debt investments and generate returns from business owners making repayments to you each quarter. Each listing has its own target investment multiple, which determines how much the business will pay you each time. Mainvest targets 10% to 25% by the investment’s maturity date.
Drawbacks to consider
The benefits to Mainvest are many, but every platform has its downsides. In order to give you the full picture, here are a few things that may give you pause when evaluating Mainvest for your investment needs:
- Illiquid investments: Unlike many other investment platforms, Mainvest doesn’t currently provide a secondary marketplace where investors can sell their investments should they need or want to. This is because you’re financing business debt rather than equity. This means that once you’ve invested, you’re committed to seeing things through to maturity.
- High potential for risk: Since you’re investing in business debt, you are dependent on that business’ success in order to see payment. While Mainvest has a high percentage of businesses remaining on track to pay their debts—again, every investment opportunity is thoroughly vetted before it comes to the platform—there are more risks in this model. If a business goes under, you may not see your returns.
Reasons to try Mainvest
While Mainvest is open to all investors, whether they’re accredited or not, each investment platform is best suited to a particular kind of investor. Who is that for Mainvest?
Anyone looking to break into a new investment asset to diversify their portfolio, while also investing in entrepreneurs striving to make their communities better and more beautiful, is a good candidate for Mainvest. Risk is always a consideration in investing, and slightly more so here, since you’re investing in small business debt—but with Mainvest’s vetting process and track record, the risk is less than it may initially seem.
If you want to put your money toward something that has the potential to be directly impactful to local communities—and also very lucrative—this could be the platform for you.
Bottom line
For many investors, using their capital to invest in the growth of small businesses is a rewarding and exciting endeavor. If you’re looking to diversify your portfolio and make a difference in the lives of not only business owners but also the communities that make America the rich and colorful place it is, Mainvest is a great option for you. Visit them online to learn more and get started.