R
unning an equity crowdfunding business is a lot like operating a private equity firm, but on a mass scale. Private equity (PE) firms work with accredited and corporate investors as well as corporate fundraisers or startups. In contrast, a crowdfunding platform focuses on retail and high net worth investors and startups.
A PE firm rarely works with high net worth investors, not speaking about the retail investors with low capital. This has opened an opportunity for the crowdfunding platforms to provide opportunities for retail also known as everyday or non-accredited investors to invest in the early-stage startups.
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