MicroVentures Review

As most of my readers know, I have a strong interest in peer to peer lending. I was an active lender on Prosper for a couple of years before realizing the wide difference between Prosper’s actual default rates versus what was being reported. I also have a fascination with one day becoming a venture capitalist and getting involved in private equity. I’m just a few 000’s added to my net worth away. So I was very excited to see a merger of these two worlds when reading a recent article in Entrepreneur magazine about a new business called MicroVentures. Microventures is seeking to establish a peer to peer investing platform that bring investors and businesses together.

For businesses seeking venture capital, attempting to raise money through MicroVentures requires a preliminary business plan review, an initial $99 application fee, and then an additional $250 to cover due diligence costs. All of this happens before any outside investor even sees the company or it’s business plan. At launch, MicroVentures is limiting the amount of funding that any start-up can request to between $50,000 and $250,000. This is likely an attempt to prevent any one single company from sucking up all of the available funding from what will likely be a small investor community in the beginning.

For investors, there is no cost to sign up, and the minimum investment in any company is a mere $250. The Entrepreneur article suggests that there is a cap on the amount you can fund a company, but that is likely negotiable. Given the struggles that Prosper.com has gone through trying to appropriately vet potential borrowers, I will be curious to see how far MicroVentures goes in protecting its investor community from sham business plans.

For now, all you can do on their website is give them your email address so they can let you know when the site is launching. I will add to this review once more data becomes available.

UPDATE 9/9 The site has launched, and I have signed up as an investor by taking their questionnaire. There do not appear to be methods to transfer funds to the site yet. Also, there do not appear to be any ventures listed to fund. More from me as the site develops!

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