Investing in SMEs
Investing in SMEs? It is the 'motor of our economy', as politicians often explain. By investing together with other investors through sharefunding, you bring together the capital that that engine needs to grow.
They are not the companies that you find on the stock exchanges and at the large (online) brokers. Instead, you get to know these companies much better. If you believe in the goals, mission and plans for the future, that is the main reason to get involved.
You invest in SMEs as an ambassador, with whom you are much more involved than as an anonymous shareholder. On the other hand, investing in SMEs naturally involves risk. At Eyevestor we collect the important information for you that helps you make a good assessment.
Finally there's the opportunity to participate in the engine of our economy
Risk: canvas and SWOT
You want to invest in SMEs, but of course not without being blind to the risks. What are the company's plans, where is it currently located and what bumps are there in the road?
Before investing in SMEs, it is wise to gather the necessary information:
- Team
The team is the heart of every company. Validate for yourself whether you think the team is in the right balance with the objectives it wants to achieve. Whether the team members are complementary to each other. - Business Model Canvas (BMC)
The BMC describes what the SME does, in which market(s) it is active, and what the specific target group looks like. It is the summary of a company, where you can see at a glance what it does and whether it fits your vision and story. Make sure you understand how the company works. And consider whether you believe in the objectives, vision and plan of action for this. - SWOT-analysis
The SWOT analysis of an SME tells about the strengths, weaknesses, opportunities and threats that play a role for a company. It shows why the business will be successful, what needs to be worked on and what in the environment looks both favourable and dangerous. In combination with the BMC, this helps you to make a good estimate of the expectations for the future. - The entire Eyeventure
Also the pitch intro, the financials, the proposition, the valuation, when the marketplace opens. The legal structure, the Member types, the AFM information document. They all contribute to the total picture that you need to feel confident in to decide whether your deal fits your needs and the risks involved in being invested. Be guided by the right personal, financial and business elements at play. Also ensure that your investment risk is spread across different asset classes, sectors and instruments.
Starting companies and specific sectors
You can invest in SMEs with a focus on start-ups (https://www.eyevestor.com/educatie/investeerders/investeren-in-beginnende-bedrijven/), in specific sectors or in a larger number of companies (https://www.eyevestor.com/educatie/investeerders/investeren-in-bedrijven/) to ensure greater diversification.
Avoid investing in one company or one specific sector. That way you run a relatively high risk. You can spread that out by making several small investments in companies you believe in based on the BMC and SWOT analysis.
You do not only invest in SME companies for financial gain, but precisely because you support the mission and vision of the company.
Investing in SMEs
Do you want to invest in SMEs? At Eyevestor, we share the important information such as the BMC and SWOT analysis. Make sure you know what a company does, what it stands for and what objectives it wants to achieve. That way you invest in SME companies that match the vision you believe in.