Become A Lender: Help people that Banks don’t want to deal with and make nice Yield : Collateralized Lending, Spread the Risk Lending

loan shark photo

Become a Loan Shark. Photo credit (cc) Jesse Wagstaff   http://www.flickr.com/photos/jesse

Cum Grano Salis

We are starting off this page with a warning box, because basically we don’t care if the folks promoting these new sites like us.  All of these schemes are promoted on the internet, radio, financial TV networks and newspapers as super wonderful ways to make money.  It seems like sometimes the only fact checking that goes on is “are we pronouncing your name right?”  But you have to be willing to face the real risks, and we are just looking at what’s out there; we are not being paid to promote an investment.  If we have some bad info, we will correct it.  And as stated in our TOS we are not “experts” legal or otherwise.  But all of these schemes smell a bit fishy, so take their claims with a grain of salt.

A lot of the rational behind the investment opportunities is based on the idea that mom and pop investor would be super excited about getting into a cool investment, such as real estate, or the hottest disruptive technology, and that excitement clouds financial realities.  Why can’t you invest like Trump or Google?  Generally speaking, they seek out great investments rather than being sold investments that others have passed up.  

Why Opportunities Exist in Small Capital

Funding Todays Consumers

Considering the amount of money you can make relative to a saving account, you will feel like a shark.  There are two factors which make people willing to pay these high rates of interest.  Need cash now!!  The traditional Dutch-Anglo value of thrift seems to be less prominent in our culture.  Being thrifty or cheep is seen an “un-cool.”  People live pay check to pay check, and their budgeting consists of trying to spend all the money from the check before the next one comes.   They need to have what they need to have.  For instance, on the radio you can hear commercials for a company called Rent a Wheel.  This is a real business that installs fancy wheels and and tires on cars–most of which already have wheels.  A lot of people who get these things do not have the $1,000 + on hand to pimp out their ride with fancy wheels themselves.  Rather than save up, they rent wheels.  And pay much more than they actually cost.  A while back, there was a TV commercial that stated you can rent furniture and “get the furniture you deserve–today.”  Another example from the radio is the company that can put $2,500 in your bank account today for only $13.50.  Yes that’s $13.50 interest per day.  An on their commercial they do in fact say “only $13.50.”  Now with savings being so un-cool for many people, any unexpected expense becomes an emergency which they are willing to pay “whatever.”  As 2014, your local bank are offering less than 1% on savings accounts, but down the street there is a paycheck advance place that makes around 400% (Based on ftc example of paying $15 for a two week loan.)   And even with the recent legislation, fast money lenders have found ways to skirt the law such as becoming chartered by Native American tribes.   People will pay these high rates because they Need the Money!

Funding Businesses

 You have an opportunity because traditional financial institutions just don’t want to deal with funding business small ventures.  There is an old saying which has a lot of truth to it, “Banks will only lend money to people who don’t need a loan.”  Just think about all the small businesses you patronize on a daily basis they all have one thing in common they can’t go down to a local bank and borrow borrow capital they need to expand their business.  And is not even worth their time to go to a bank and ask about borrowing money for a new business–something haven’t done before. Why?  Well they just don’t want to deal with it. The lending officer or branch manager is putting her career on the line.  It takes a lot of time to analyze a business.  Generally it’s easier for them to find your run-of-the-mill vanilla mortgages and just sell them off  through federal government.  It’s cookie cutter lending–get the same documents from every lender based on SBA criteria and use the same equations to determine if they qualify.  If a borrower is good for the money but doesn’t qualify based on the cookie cutter criteria, tough luck.  They are told NO, or they are told to consider a home mortgage dressed up as a business loan.  

Adverse Selection in Angel Investing

Okay, if you are reading this, you will not be the entrepreneur’s first stop. This is especially true of technology companies that have access to the big boys in Silicon Valley and New York.  You can be sure that businesses have gone to the usual route and contacted the people who make Private Equity (PE) investments.  And you can also assume they have thought about loans before they came to you.  They have a vision, why would they want to give away equity in their vision.  The reason they are advertising to small investors is that their ideas were rejected or they wanted to keep a bigger share of the profits.

So to point out the obvious, maybe those professional investors and bankers have a little bit more experience in knowledge than you.  So that’s something to think about.

But as we have said before, there are a lot of people that the big guys don’t want to deal with.  Maybe the investment is just too small take up their time, maybe the founder seems like a weirdo, maybe they didn’t go to a top 10 MBA program and actually talk like normal people.  

Angel Investing

Angel investors accept some risk in funding ventures with the expectation that they will make a lot if the business succeeds.  In exchange for cash, they take a risky equity stake in the business and make their money when they are bought out in the future.  This is an ideal source of funding for new ventures since, they are building the business and will not have the cash flow to make payments over time.

Technically it’s not legally possible for businesses to go out and solicited investors.  That’s because the government has a lot of rules in place prevents small unsophisticated investors from getting hurt.  There are exceptions however for once referred to as accredited investors.  To be an accredited investor you must meet certain requirements.

 Accredited Investor.  For an individual to be considered an accredited investor the Securities and Exchange Commission (SEC) has these requirements: (a) an has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase, excluding the value of the primary residence of such person or (b) an income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year.  SEC webpage   

Gust gust.com   This is one of the most well known Angle sites.  The idea behind this site is that the encourage investors to join angel groups.  This allows you to discuss investments with other angel investors and share your knowledge.  You can also spread the risk out.  Another advantage to their website is that they have a broader reach in terms of the types of startups, but as we looked at it that’s not the case.  There are a lot of website/app businesses categorized as something other than tech. If you have an expertise in something other than internet technologies this might be one location to start your search.

Go Big Network GoBigNetwork.com .  They help businesses and people starting out by advising on how to get started and it’s implied that there is some screening so that you aren’t dealing with crackpots or people who just got a cool idea.  Fund seekers pay $70 to $200/month depending on the amount of exposure they gain on the website.    They verify that you are an accredited investor and the minimum investment is $10,000.  They are currently working with over 20,000 investors and have helped fund over 300,000 ventures.

Another new opportunity is a company called MicroVentures http://www.microventures.com/.   As with other “crowdfunding” opportunities, they require that you are an accredited investor to buy equity, but if you do not have a million dollar net worth or currently make over $200k/year they will let you invest in debt instruments.  (Forbs article about Micro Ventures)  They seem to help fund mostly internet start ups.  We are not sure why these companies are going through Micro Ventures rather than the so called smart money–VC money in Silicone Valley.  But according to the Forbes article, they are able to create an investment partnership, sell the partnership all for a 10% cut.  That sounds like a lot, but it might be a better deal than traditional VC would be willing to give a startup.

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CircleUp.com  The rub on the other sites is that the focus on IT startups.  Okay, the fact that they are seeking investors on these sites indicates that they have been checked out by Venture Capital and have not received their necessary funding for whatever reason.  It’s possible that VC insiders know  about tech startups than the average Joe.  But Circleup focuses on consumer goods–think Food Products with with the belief that people will be able to spot the next big trend.  The idea is that these companies will be purchased by big corporations.  These are more like the stuff you see on ABC’s Shark Tank.

Rock the Post This one is supported/promoted by actual ABC Shark Tank Shark Barbara.  They have a lot of it startups seeking funding, and they are helping these new companies navigate the SEC’s general solicitation rules.

 

 Investing in Real Estate Developments–Trump Style (well something like that)

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This concept has to potential to be the next big thing.  You are buying equity in development projects.  This investment was previously the exclusive domain of the very wealthy, pension funds and the like.  

Fundrise www.fundrise.com claims to have developed a large legal document that basically allows them to do CrowdFunding of real estate developments based on the rules in place before the JOBS Act rules came int effect.  You can think of this as Regulatory Technology because they have been able to deal with the regulation hurdles in a cost effective way.  And the document necessary to deal with all the regulatory issues was over 12 pounds!

Your investment can be reasonable–as little as $100.  As we understand it, you get a share in the profits proportionate to your equity.  They have two types of investments public and private.  You do not have to be an accredited investor to get in on the public offerings, although there are residency restrictions.  Currently they do not have any developments in the Golden State.  Private offerings are available across state lines to accredited investors.  The way it works is that you are a buying shares in a Limited Partnership.  And as such, you are not double taxed–that is the company does not pay taxes, and then you pay taxes when you receive dividends.  And unlike investing in a development yourself, you are not personally libel if things do not work out.  Without this legal structure, if a development goes bust you could be on the hook for contractor expenses, property taxes …

They have a point.  Data Driven decisions by people in far away places might not make the best decisions.  If you live in a community, you might have a good idea about what’s needed–and you can back up your opinion with cash.  If you are right, everyone wins.  

A related company is Popularise  popularise.com   We don’t understand this one.  They have a cool app that lets you vote on what should be in a development.  For instance, if you have ever thought it would be cool to have a mall with a Wall-mart, Trader Joe’s, Good Will store, and a couple of Five Star Restaurants in the same mall, you can vote for them; and they will include the popular ideas in their plans.  But is it like A field of Dreams — If you build it, will they come?  We are not sure.  And don’t big developers have market research to see what will work where?  Well they are betting on developments that are not being built by the big guys because they don’t have the vision.  People in the community, or care about the community, and build a development to serve the community.  

Both of these websites play on the theme that some communities are underserved by Developers.  All the good stuff is built in the Upscale mostly White/Asian areas where most people have a job, live in expensive houses, and have a car.  People living in underserved areas cannot enjoy nicer retail.  Is this unfair?  Probably so.  Can you make money providing retail/office/luxury residential to areas that big developers don’t want to touch?  We are not sure.  But it seems like an interesting concept.

Reality Mogul www.realtymogul.com

Prodigy Network (they have access to projects outside of the US)   English Site prodigynetwork.com/en/

Realty Shares https://www.realtyshares.com  We don’t really know a lot about this one.  For as little as $5.000, you can get in on a “pre-screened” investments with estimated returns 7-18% / year range.  Investments seem to be short term with aims to sell out in less than 5 years, and flip deals with 6-9 month timelines.  We are not sure if they are selling real estate and hence have a fiduciary duty to offer investors the best deals through their prescreening process or if they are selling securities.  Their website states you are investing an LLC which invests directly in the property either through a loan (Mortgage under state laws?) or shares in the LLC (Regulated by SEC?).

What are you investing in?

Well we looked into some of these “crowdfunding real estate” opportunities, and to our suprise you don’t actually own the real estate in the pictures.  It’s like a TV Dinner.  What is clear is that you send them money.  What’s not so clear is what do you own?  You invest in an out-of-state corporation or LLC which has to sole purpose of funding a limited partnership which owns the building.  You are not investing directly in the property.  Your name is nowhere on title.  And read the disclosures.  This is not a Real Estate Transaction under the law, so they do not have any fiduciary duty to you.  For instance if you are buying real estate in california, your agent/broker must provide you will all the information they know about, and must disclose anything that would adversely affect the value.  For instance if they cannot negotiate the sale of a house from their friend for a price higher than you could buy one down the street.  But a lot of these schemes are structured in such a way as to legally skirt this fiduciary obligation.

Another issue we noticed is that the commissions never seem to end.  We noticed in one opportunity that as rent passes through the various legal entities someone seems to getting a cut. So it’s like an annuity for the seller/administrator.  Another problem we noticed was that there was no clear agreement as to how profits would be split, and what prevents dilution of your share.  And since you have no control, what motivates the administrators and out-of-state corporations to work in your interest?

In most cases, the rationale explaining  how they could make huge profits when the current owners were not doing so well with the property came down to a Magic Winning Management Team that had the skills to get a lot more rent out of the property.  Well we have to ask why the current owners didn’t think about that?  And as with the tech companies, there is a large network of professional real estate investors.  We must assume they passed on these opportunities.  Why?

Non-Standard Metrics These sites give you percentage return.  But a lot of these are what’s referred to as “cash-on-cash.”  What does that mean?  Well we are not really sure.  For instance, if you have a $1 million building and you clear $50,000 after paying expenses and commissions, most people would say that’s a 5% return.  But what the current investors only put in 10% of the building’s value in cash, well then that’s a 50% return.  But is cash invested by other investors included?  What if the previous round of investors had put in some cash and taken some debt?  So we are not clear if “cash” is a return on the cash you put in or a return on all the cash invested in the project.  Also, these returns are inflated because of leverage–you are getting a higher return, but you are also taking a much higher risk.  That is, it’s more likely that the building’s rent will be able to cover debt service.  And a lot of the financing is short term so a change in market conditions will affect future interest rates and the ability to refinance.  So you cannot compare a 5% return on a building with a 10% return calculated “cash on cash” or to a 7% return on a bond.  Additionally, these are based on projected rents which adds another layer of uncertainty to the calculation.

Well it’s something to think about before you mail in your check.

 

Second Mortgages and Trust Deeds

You can make second, third, or fourth mortgages, or as we call them in California Trust Deeds, to people who may have a lot of equity in property but cannot qualify for a regular loan.  The way the numbers work is that in the event of a foreclosure, (1) first the county gets paid back property taxes, (2) lien holders may get paid next (were not 100% sure), (3) court costs and administrative fees are paid, (4) next comes the guy who owns the first mortgage, next comes the guy who owns the second mortgage and so on.  If there is not enough money to pay everyone–and usually there will not be in a foreclosure–the people down the line don’t get paid.  The other issue is that if Henry the Homeowner stops making his payments and someone ahead of you forces a foreclosure, your usually wiped out.  At that time, you have the option of making the payment to the people ahead of you and taking on the expensive task of foreclosure.

You will often see these promoted in the newspaper, sold by real estate agents, and even sold over the phone through boiler rooms.  The pitch goes like this: you’re a putz for making nothing by putting your money in a CD.  Don’t you and your grandkids deserve a better lifestyle.  Does little Suzie want to go to college or does she want to end up washing dishes.  This is a great opportunity!!  It’s as safe as the bank!  After all what borrower would stop paying?  They would lose their home; and even if they did you’d be paid off.  At first this seems like a great way to make some hefty interest, because you can foreclose on their home if you don’t get paid.  

This seems safe, but investing in seconds has a long history of fraud.  One of the most common frauds is simultaneously selling off a trust deed to two people.   Also be cautious of people selling off shares in a trust deed.  When shares are sold off, it becomes a security which is regulated by the Securities and Exchange Commission.  If the sale has not been approved by the SEC—RUN.  Again, you can see the possibility of fraud.  Who knows if they will sell off 100%, 300%, or 1,000% of the trust deed.
There have also been cases of trust deeds being sold off for houses that have yet to be built.  And now with a PC the fraudsters can simply make the documents they need.  This type of fraud has been going on for a long time because it’s easy.  See the Mortgage Fraud Blog or you will see stories of investors who have been ripped off in the OC Register.  Just search their website for trust deed and fraud.  The fraudsters are like well dressed cockroaches, as soon as some of them are caught, new ones crawl out of the woodwork.  If you are relying on this website for advice, you probably should not be investing in this type of instrument.  Pay for the advice of a qualified Real Estate Attorney before you hand over any money.
 

Lending Money to Family.  If you have money, you probably have been hit up by a relative; and it’s hard to say no.  So protect yourself and do the loan in the form of a mortgage.  Otherwise, that a loan will most likely turn into a gift when people decide not to pay.  When you ask for your money back–you become the bad guy.  They will say you are “Unfair.” But if you structure the loan with a real agreement and have the payments go through a financial institution you will avoid these problem.  You will get a better interest rate than at the bank, and your relative will get the funding he/she needs.  A company has set itself up to facilitate this type of lending.  National Family Mortgage  This has two advantages (1) it deals with the IRS’s gift tax provision and they do the tax reporting (2) they can give your family member a Pre-qualification letter so that he/she can bid on a house.  The buyer has a much greater chance of having their offer accepted with a pre-qual letter than writing “uncle Fred will loan me the money” on the offer.  They will even service the loan–send out statements and keep track of the balance.

Collateral Based Lending

The lender takes some interest in an asset that the borrower owns to secure the loan.  This is the easiest way for credit challenged people to borrow money.  And and it costs less than a payday loan.

  • Pawn Shop  The best thing we can say about this business is that it looks great on TV.  To get into this business is costly and takes a while to get started.  We don’t know anything about this business, but it seems like you need to have a lot of specialized knowledge that’s not taught in school.  You need to be able to value stuff quickly, and you need to be able to evaluate your customers–as if they pawn a stolen item, you have to give it back to the real owner.  You need to get a Pawn Broker’s License from the California Department of Justice, Business Permit from your local city, and usually clearance from the police.  We found the CA Department of Justice application on the website of Oakland CA.   The hard part will be finding a location.  Cities have put restrictions on the number of Pawn Shops they will allow in an area, and their location.  Becoming a pawn broker is outside the scope of this website.
  • Title Loans  This business makes loans secured by the title to people’s cars.  To get into this business you need to get a pawn brokers licence from the California Department of Justice, and an Auto Dealer’s Licence from the DMV.

Spread the Risk — Peer to Peer Lending

Spread the Risk What makes peer to peer lending make work from the small lender’s prospective is that instead of making big loans, you can divide your money into a bunch of loans for different people.  It’s analogous to the way an insurance works.  You expect to have some losses, but the premiums you collect will more than cover the losses.  And you will have a profit.  Think of the Premium as the amount you can charge over a normal interest rate.  And like an insurance company, you have to be a good judge of risk.  The idea behind these sites is that people can judge other people better than a large institution using the same standards for everyone.  In this case, you have to judge how likely these people are to pay off the loan.

Borrowers have few options.  Consumers refinancing debt at high interest rates such as credit card debt or medical expenses have few options.  They cannot get a loan at the bank because the bank may not want to provide an unsecured loan even if they have stable employment and a good credit score.  So they are borrowing in the range of 10-21%.  That sounds like a lot.  But there is another set of consumers who don’t even have access to credit card debt.  They are stuck asking relatives for a loan or going to pay-day loan places where the interest rates can be in the range of 100%/year.  They have to renew these loans every month.

People borrow from these sites for a variety of reasons.  Buying a home, financing a business, giving a child her dream wedding, paying off debt at higher interest rates…  Not everybody is down on their luck.

According to a NY Times Article, some people put forty bucks up for each loan; and four hundred million dollars have been lent through the top peer to peer lending sights in the past few years.  And Lending Club founder was quoted in this article as stating that no investor who has invested more than $10,000 has lost money.  And he goes on to say that even insurance companies are putting money to work.  The article goes on to quote a money manager who invests in Lending Club.  He expects around a 7% return and stays away from the loans @ 12-14% .  And according to a more recent article in The Economist, most of the loans are for credit card consolidation.  They state that borrowers are typically charged 18% consolidation loans but they can get funded for around 14% on these sites.  And the article goes on to state that institutional investors — insurance companies, hedge funds and the like–are now snapping up must of the loans.  But there are some loans left for individual investors.  

As an lender you are in the driver’s seat.  It’s easy for these sites to find people who want to borrow money, but it is hard to find people willing to put up money.  So the do some background checks on borrowers to establish categorize  their credit. These might include employment checks and credit scores.  There are two big platforms,Lending Club and Prosper, and some smaller platforms that focus on niche lending markets.

  • www.lendingclub.com  Lending Club is kind-of strict as to whom they will let on the system–according to their website less than 10% of the applicants make it.  They need to have a 700+ credit score, 15 years of credit history, and almost a $70,000 annual income.  The website has originated almost $600,00,000 in loans.  Once you deposit your money, you allocate to various borrowers.  You can see how long hey have been at their job, their debt to income ration, and for what its worth their credit score.   Borrowers are graded A to G.  When we checked, lenders were getting about 7% from A grade people and 17-19% from D grade people.

 We found this video on Youtube.  This guy explains how he makes his lending decisions.  We should note that he seems to be associated with a website that has a click-through ad for Lending Club.  (We do not receive any advertising money other than from Amazon for books we like.)
  • www.prosper.com  This is a similar concept to Lending Club, but it has it’s advantages.  You can either buy into a pool of loans through their “quick invest” feature, or you can look at the profiles of individual lenders and decide whom to lend money.

 We found this Bloomberg video on Youtube.  It is an interview with Prosper’s CEO.

So what’s the difference between Prosper and Lending Club?  Well they both make claims about low loss rations.  For what it’s worth, Lending Club CEO Renaud Laplanche explained in an interview with Reuters that Lending Club does the credit screening and sets the rates while Prosper lets it’s users decide whom gets funded.  So the fact that they both only fund about 10% of loan requests, has a different meaning.   He kind-of implied that since Lending Club makes the underwriting decision, it’s a better deal for lenders.  Both sites have an incentive to make sure investors get paid back, and they both claim to do their best in therms of credit screening and credit ranking.

Mosaic  joinmosaic.com  This company uses Social Lending to help fund alternative energy projects.  Mostly Solar systems on large buildings.  The SEC has allowed them to specify what return you can expect to get, and you are promised a financial return.  You can earn more than if you bought bonds or put your money in a CD.  See wsj story  The borrower is funded by Mosaic, and then the loan is divided up among investors who buy a portion of the loan.  The amount leant is less than $1,000 and you do not have to be an “accredited investor” if you live in California.  And unlike some of the other social funding opportunities, the business model is pretty simple.  Solar is a known technology, and the amount of money an installation can produce can be estimated by the cost of electricity and the government subsidies.  This offers building owners an alternative to leasing solar panels from a company like Sun City or taking out a mortgage from a bank for a specific project.  Of coarse you need to consider the borrowers ability to pay back the loan. Caution, it’s not a slam dunk.  Even if the borrower saves a lot of money on electricity, if the buildings are not run well you might not be paid.   So you have to consider other factors.  For projects in California, older buildings could experience a large property tax increase if Prop 13 is repealed.  In that case, a marginally profitable facility might loose the ability to pay, and you have no practical way of getting your money back.

Common Bond http://commonbond.co/alumni-investors  This site helps alumni invest in students from their university.  Currently they are focusing on top graduate schools at top universities.  Their website shows that you can earn about 4.25% on your investment.  They are currently funding Wharton MBA’s but will expand to 20 programs soon, so this one might take a while to turn into an investable idea unless you are an accredited investor/Wharton Alumni.  (If so we are surprised to find you reading this page.)

Social Lending to Help People

KIVA  This site makes loans to people in developing countries and now in the United States.  In the US loans are up to $10,000.  They would not have any other access to money–or at least access at a reasonable rate.  While there is a possibility of losing money, it does not appear that lenders get interest from Kiva loans.  Your return is knowing that you have helped someone make a living.

Green Note We don’t quit understand this one.  According to this article Green Note is a way for you to offer student’s loans at the same rate as the federal government’s Stafford Student loans.  But the interest rates on those loans are subsidized by the federal government, and students have access to those loans–so they must have maxed out.  Also, the Federal Government has the ability to collect student loans in ways that private lenders do not.  So it looks like this is a conduit to help your relatives get through school and maybe increase your chances of getting paid back.    

Private Lending

Private lending refers to private loans made from one person to another person.  This is a bit more risky than Prosper and Lending Club because it is not possible to spread out the risk.  This is suitable for very high wealth individuals.  The American Association of Private Lenders offers education and advice.  The other advantage of joining the organization is that you get some credibility and you are listed on their high ranking website.  As we have discussed above, people with good credit who would have qualified for a mortgage a few years ago.  Membership has its price.  $350 for a basic membership and $1,250 for a Premier membership.    A lot of these lenders act as middle men.  They make loans at high interest and sell the loans or trust deeds off to investors.  The investor receives a bit less interest.

Recently, there has been a need for loans to flip houses either to turn them into rentals or to do a rehab.  It’s very hard to get a bank loan to do this sort of thing, so flippers borrow “hard money.”

Get a piece of the Investment Bankers’ Action

Second Market gives you an opportunity to get into a lot of investments that had been reserved for Investment Bankers or Angel Investors.   (1) You can invest in private company stocks that are pre-IPO.  The story goes something like this: employees at start-ups are granted stock as part of or as their entire pay package.  The employee needs to eat, pay their rent, or wants new house.  So they sell their stock off before the IPO.  This is the website where you could have gotten into FaceBook before it’s May 18, 2012 IPO date.  But the story has some holes in it.  Employees and original investors may have some inside information and a lot of times there is not a track record of audited financials to look over.  Also you don’t know what it has been trading at, so valuation of a stock is hard to do.  You could just buy cool stuff like face book and hope it will work out and not worry about numbers.  They also allow you to invest in: (2) Stocks from small community banks. (3) Securitized loans–securities backed up by pools of loans.  For instance Mortgage Backed Securities.  Well, you have the ability to invest in the same things as the big banks–might not be a good thing.   (4) Claims to assets from bankruptcy court.

As with the funds that deal with initially investments, you have to think about the selection problem.  Generally, you are buying from people with private knowledge which is not reflected in the market price–because there is no market price.  So the question you should be asking is “why are they selling?”  In some cases it’s because they have made their money and are seeking higher returns–so what does this say about the future returns of any given company.  In other cases since the insiders have been working for a company they know some bad information and be trying to get what then can before it gets out.

 This video goes over buying shares in start-up market.  That’s one of their four opportunities It starts after a You-Tube commercial–which we do not get paid for.

Click here to see all Second Markets Videos 

The last time we checked, they have stopped promoting investment opportunities on their website and are now acting as more of a broker to wealthy investors.

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