Small business investors must first identify the right opportunities among the millions of potential investments. Then, they do their own due diligence, examine financial statements, interview company executives, and evaluate market size and competitive challenges. Finally, they have to negotiate with the company how to set the price of shares, how much to charge for loans and other terms of the transaction. According to the Small Business Administration, roughly half of small businesses will fail in five years, making small businesses one of the riskiest investments you can make.
Small businesses are not suitable investments for everyone, and this is not just an axiom but an official government rule. For too long, small businesses have struggled to access capital, while institutional capital has only benefited a small proportion of entrepreneurs. Mainvest is making funding for small businesses more accessible by aligning incentives with community investors and empowering founders to set their own conditions. Mainvest supports local small business ecosystems by allowing the community to invest directly in local small businesses and, at the same time, providing access to capital on favorable terms for entrepreneurs.
