Equity crowdfunding and start-engine crowdfunding can be risky!
I'll show you what you should pay attention to when investing via equity crowdfunding through Startengine.

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I'm going to tell you about an investing mistake you DON'T want to make.
I've spent countless hours analyzing Uncle's Ice Cream business, and while you may not want to invest in this particular company, these common investing mistakes can affect YOU TOO!

Uncle's Ice Cream is raising money through crowdsourcing investment platform StartEngine.
But should you invest?

I have taken a close look at the Start Engine documentation, registration CF filings, SEC filings and looked at their financials.
Highlights include a whopping $13 million valuation on just $1 million in revenue and some exciting expansion plans. But is that enough to make it a good investment? Or will you regret it?

The central theses:
When investing, I pay attention to the following:
1) The company in general: what it does, where it operates, its management team and its mission/vision.
2) Finance: balance sheet, profit and loss statement, cash flow statement
I look for trends, growth potential, historical earnings and cash management as well as growth forecasts
3) Comparable companies in this space: What is the comparable revenue multiple, EBITDA multiple (earnings multiple) and compare it to the company I am analyzing.
4) I look at the company's growth plans and growth potential and assess whether the company can increase its value (and equity) five or ten times.
5) I weigh the risk of the company going out of business or not growing and compare it with the benefits and opportunity costs to make an investment decision.

From my research on Uncle's Ice Cream, I know that the company is trading at 5x higher than other companies in the space. The company would need to grow 5x larger to reach its current valuation and break even on the investment. Additionally, there is no exit in sight for the next 5-10 years, making it a risky investment compared to the profit opportunities.

For all these reasons, I am OUT and will not invest in the company.

I'm rooting for the management couple. They have a lot of good spirit and an ambitious dream, and I want them to spread the Aloha throughout the USA.
However, given the $13 million valuation and the high level of risk uncertainty, I think this deal is too expensive. I hope they prove me wrong and grow into a company valued at hundreds of millions of dollars!

And that is the investment MISTAKE that often happens, not only with private companies, but also with stocks and cryptocurrencies.

We often hear great growth stories and promises of making tons of money from an investment, but it's important that we look at the numbers and data to see if it's a viable investment that could realistically grow five, ten or even a hundred times, but still hedges our downside risks and lets us buy the companies at a fair price.

Be careful when investing and always do your own research!

Let me know what you think about the company in the comments and tell me if I missed anything.

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*None of this is intended as investment advice, it is for entertainment purposes only. The video should be accurate to the best of our knowledge at the time of publication but may be inaccurate in the future.

Chapter:
0:00 – Introduction
0:17 – Uncle's Ice Cream Equity Crowdsource Fundraising on Startengine
0:45 – What’s Uncle’s Ice Cream Doing?
1:15 – What is Uncle's Ice Cream's target market?
1:58 – What you need to pay attention to when crowdsourcing investing!
2:09 – How to analyze the balance sheet
3:48 – How to analyze a profit and loss statement
4:44 – How to calculate gross margin
5:47 – Key takeaways
6:20 – Analysis of multiples
8:02 – Company expansion plan
9:08 – Summary and my thoughts on investing in Uncle's Ice Cream
10:47 – Another concern: Will management be able to scale?
11:13 – Did I invest?
11:44 – Common investment mistakes!
12:16 – Conclusion

#equitycrowdfunding #crowdfunding #startengine

Subjects:
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