Venture.co is a Vermont-based broker-dealer offering what can best be described as an eclectic mix of crowdfunding investment opportunities. Although their site also references two related companies, “Pitch.it” and “Designbook” offering other services to entrepreneurs, neither appears active at the time of this writing.
Types of investments Venture.co offers
Venture.co includes real estate investments as well as startup and business investments. They also include some investments offered under intrastate rules permitting investors from a particular state to invest in companies raising money in that state under different rules than the national SEC regulations.
What do you get when investing with Venture.co?
Venture.co offers quite a mix of different security types. The specific security an investor will receive depends on the investment, and varies quite a bit among the investments available on Venture.co, including debt, equity, and convertible notes.
With Reg CF investments, investors always receive a security directly from the company (whether it’s a promissory note, common stock, or some other variation). With Reg D investments (the ones open only to accredited investors), the investment is more often through a special-purpose vehicle such as an LLC.
How does Venture.co make money?
Venture.co doesn’t charge any fees directly to investors, though they do take a commission out of the total amount raised (you can find the details within an individual offering’s documents). Prospective investors should be sure to review the full offering details before investing to understand any ongoing fees associated with the investment, especially for real estate offerings, as those may include annual fees, property management fees, an other expenses that could reduce the return to investors.
Potential returns and cashflow
Many Investments on Venture.co are high-risk investments in startups. The real estate offerings typically include some ongoing cash flow, for example a preferred return paid out of rental income. Except under very limited circumstances, Reg CF investments must be held for at least 12 months, with minimal expectation of any secondary market for the investment after that. Most startup investments lose some or all of their value. While some investors achieve excellent returns from startup investing, that is a rare outcome and requires substantial diversification over time combined with very careful investment selection.
Breadth of offerings on Venture.co
For a small platform operating out of Vermont, Venture.co has a fair selection of opportunities, though the minimums vary widely (from $100 to $50,000 among the open investments at the time of this writing). Venture.co is one of the few crowdfunding investment platforms to offer both real estate and startup investments.
Regulatory framework and due diligence expectations
Venture.co is a registered broker-dealer (you can review their information on FINRA’s BrokerCheck service). Broker-dealers are subject to specific due-diligence requirements to ensure an investment is “suitable” for their registered customers, or they can face fines and civil action. (That does not of course provide any guarantees about investment return or performance!)
While some platforms emphasize their curatorial role in selecting offerings, Venture.co does not appear to do further review beyond the standard broker-dealer items such as background checks and financial statement reviews.