As a follower & investor of Nothing from the start, want to take an opportunity to play devil’s advocate for this post. Through this not so short post, want to put forward some thought-provoking (hope so) points for both Nothing as well as customers / investors / prospective investors.
Let me start this with two popular quotes:
“Risk comes from not knowing what you’re doing.” – Warren Buffett
“The entrance strategy is actually more important than the exit strategy.” – Edward Lampert
More or less self explanatory, but need to be understood in the light of Nothing Community Funding. We all should understand the risks an investment in Nothing comes with. As also mentioned quite responsibly by Nothing on website “Just remember that investing in a startup business carries significant risks, including illiquidity, lack of dividends, loss of your investment and dilution.”
Given it is a company at its nascent stage, it is prone to higher amount of risks (many will be even uncontrollable for the management). All the risks should be understood and taken in consideration before investing.
Now coming to the exit strategy - Again given that Nothing is a nascent stage startup, the path to IPO is mostly going to be a long & challenging (not impossible, just challenging) one. Investor should be aware about this while taking the investing decision.
Having given so much of unnecessary discourse, want to put forward two questions for you all:
- Is community funding a right approach? Can it backfire with the most loyal customer loosing their invested money (in a possible unfortunate scenario)? Should Nothing think of a proper exit route for customer-cum-investor?
- Do you think the prospective investors know & understand the risks attached with such investment? Can this form of fund raising negatively impact the customer loyalty in long term with some customers finding it difficult to exit?
While I know that crowd funding is not a new or a wrong concept, just wanted to put forward a different perspective. Open for a healthy discussion in comments 😃
At the end, will leave all existing & prospective investors with the following deep quote:
“Although it’s easy to forget sometimes, a share is not a lottery ticket… it’s part ownership of a business.” – Peter Lynch
Happy Investing !!!
