When the crowd gets smart. Smart money and equity crowdfunding

17.07.2018.Lilly Milman.0 Likes.0 Comments

Let’s talk about “Smart Money”.


Smart Money for Investors

Successful stock market investors already know about it. Brokers, bankers and analysts are very familiar with the concept. So why don’t you know what you’re reading about? Well, part of its success lies in its secrecy. But this has gone on for far too long; it’s time to decode the myths behind smart money, and learn how to invest like the pros.

What do successful investors know that you don’t? They know that smart money means profit. They are well aware that mimicking the trades of well-known and historically successful investors can yield great returns. This is even more valuable for retail investors who want to ride the smart money’s coattails.

But what is exactly smart money?

Its lexicon is well explained by FT:

“Sophisticated investors who tend to pick the right moment to buy or sell assets because they can identify trends and opportunities before others do.”[1]

Its personification would perhaps take the shape of Warren Buffet, John Templeton, Peter Lynch and all the other investors regarded as the most successful of the last century.

The logic behind smart money is pretty intuitive. You can either do your analysis, calculations, forecasts and simulations on all the investment opportunities available in the market to identify the right time to step into an investment, or you can focus your attention on the same opportunities as the investors who proved to have a sixth sense.

The approach is about way more than blindly copying the big guys; it is about searching for the reason that triggered their investment. It is about learning from experienced insiders.


Smart Money for Startups

What we’ve explained so far is what smart money means for investors, but this term also extends itself to entrepreneurs looking for funds. While they personally raise money to grow their businesses, this is only one of the many resources needed to grow and scale. In addition to raw capital, they need certain skills. Many entrepreneurs spend their time trying to raise cash, but the wise ones are focusing on chasing the smart money.

Smart start-up owners know that they need more than a check to achieve success.

Sensible owners are eager to onboard investors who can bring not only capital but time, expertise, and access to networks.

When talking about smart money in regard to startups, we are referring to investment funds that are raised in conjunction with guidance from experienced investors to help grow and scale the business. It is a wide set of skills necessary in hiring the best talents, being noticed by the most relevant stakeholders, securing a continuous presence in the press, avoiding pitfalls, and, ultimately, fulfilling ambitions.


The Synthesis: Smart Money for Investors and Startups

At Bloomio, we define smart money as a crucial step in successful startup investment. Accordingly, we have been developing a series of features to embed this concept into our business model. We are committed to providing a way to offer both investors and startups a unique access point into smart investing and smart money.


Expert Board: Each investment opportunity on Bloomio is assessed by 3rd party industry experts. This is a unique approach in the landscape of crowdfunding, which tends to be categorized mostly by bias and in-house due diligence. We strive to deliver to the investors the most unbiased assessment of each startup. To do this, we developed a network of seasoned analysts and investors in different industries who will make their findings and reports available to all retail investors active on our platform.

This is a great opportunity to tap into the opinions of experienced investors thing before getting involved in a certain business. This is the smart money you’ve been missing out on.


Bloomio Partnership: We not only supporting start-ups in raising funds; our goal is to help them get the success that they deserve. While fundraising plays an important role in this, guidance from experienced professionals on how to most effectively use funds could actually have a greater value. Providing this level of support to startups is a hefty task, which is why we are developing an ecosystem to support startups during every step of the process — from raising funds to scaling the business.


[1] http://lexicon.ft.com/Term?term=smart-money

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