Is Mainvest Legit?

Jeremy BiberdorfBy: Jeremy Biberdorf

March 26, 2023March 26, 2023


In recent years, the world of investment has expanded to include alternative options that go beyond traditional stocks, bonds, and real estate. One such alternative is investing in small, local businesses, which not only holds the potential for financial returns but also contributes to the growth and development of communities.

As interest in this investment avenue grows, platforms like Mainvest have emerged, aiming to connect investors with promising small businesses. However, as with any investment opportunity, potential investors must ask themselves, “Is Mainvest legit?”

In this article, we will explore Mainvest’s business model, the types of investors it caters to, and the safeguards in place to help you make an informed decision about whether this platform is right for your investment needs.
Learn More About Mainvest

The Basics of Mainvest

Mainvest is an investment platform that allows accredited and non-accredited investors to invest in private businesses. With a minimum investment requirement of just $100, it provides an accessible entry point for individuals seeking to diversify their portfolios.

It mainly focuses on debt investments and revenue-sharing notes, which offer a fixed rate of return based on the company’s performance. These investments can provide a steady stream of income, but it’s essential to understand that they also carry risks.

Company Background

Mainvest, founded in 2018, is a U.S.-based online investment platform headquartered in Salem, Massachusetts. The company’s mission is to empower non-accredited investors to support and invest in local, small businesses while giving these businesses the opportunity to raise capital through alternative financing methods, outside of the public stock market. Mainvest’s co-founders, Nick Mathews and Ben Blieden, have backgrounds in finance, technology, and entrepreneurship, which they have leveraged to build a platform that bridges the gap between investors and private businesses.

Mainvest is registered with the U.S. Securities and Exchange Commission (SEC) and operates under Regulation Crowdfunding rules, which permit small businesses to raise capital through crowdfunding campaigns. By adhering to these regulations, Mainvest provides a secure and compliant environment for both investors and businesses.

The company focuses on fostering local economic growth by connecting businesses with investors who share an interest in supporting and nurturing their communities. Mainvest’s platform offers a variety of investment opportunities across several industries, allowing investors to diversify their portfolios and participate in the growth of private businesses in a way that was once reserved for accredited investors and venture capitalists.

Mainvest is a legitimate company with a mission to democratize investment opportunities in local businesses for non-accredited investors. Their platform offers an alternative way for investors to diversify their portfolios while supporting small businesses and contributing to local economic growth. However, investors should be mindful of the risks associated with investing in private businesses and conduct thorough research before committing their funds.

Mainvest is good for:

  • Community-focused investors: Investors who are passionate about supporting local businesses and driving growth in their communities can benefit from Mainvest’s platform. By investing in small businesses, they can contribute to the success of these ventures and foster economic development in their neighborhoods.
  • Investors seeking portfolio diversification: Mainvest offers an opportunity to diversify investment portfolios by allocating a portion of funds to small businesses. This type of alternative investment can provide a balance to traditional investments like stocks, bonds, and real estate.
  • Investors with a long-term outlook: Investing in small businesses can be a long-term commitment, as the growth and success of these ventures may take time. Mainvest may be suitable for investors who are patient and willing to wait for returns on their investment.
  • Investors interested in revenue-sharing: Mainvest’s investment model is based on revenue-sharing agreements between investors and businesses. This means that investors receive a percentage of the business’s revenue until they reach a predetermined return on investment. This model can be appealing to investors who prefer a more predictable cash flow.

Mainvest may not be suitable for:

  • Risk-averse investors: Small business investments can be riskier than traditional investments, as they are subject to the success or failure of the individual businesses. Investors who are unwilling to take on a higher level of risk may not find Mainvest’s platform suitable.
  • Investors seeking liquidity: Investments made through Mainvest are generally illiquid, meaning that they cannot be easily sold or converted into cash. Investors who prioritize liquidity or require short-term access to their funds may not find Mainvest suitable.
  • Investors looking for high returns: While some small businesses may generate significant returns, it’s essential to remember that many will not. Investors seeking consistently high returns may not find Mainvest’s investment opportunities align with their goals.
  • Investors seeking passive investments: Investing in small businesses through Mainvest requires ongoing monitoring and engagement with the businesses to track their progress and performance. Investors who prefer a more hands-off, passive approach to investing may not find Mainvest ideal.

Risk Factors and Returns

As with any investment, Mainvest investments carry certain risk factors. Investors should be aware that private businesses can be considered high-risk investments compared to traditional stocks and bonds. Although the platform’s vetting process helps mitigate risks, it is crucial to carefully evaluate each opportunity and consider factors such as balance sheets, industry trends, and market conditions.

Regarding potential returns, revenue-sharing notes typically offer a percentage of a company’s gross revenue until the investor reaches a predetermined investment goal. This rate of return can vary significantly based on the business’s performance, but it can provide an attractive income stream for investors seeking alternative investments.

Fees for Investors

Mainvest’s investment fees are relatively straightforward. The platform charges a 2% service fee on initial investments, and there are no additional ongoing fees or charges. However, investors should consider other potential costs, such as taxes on their income from investments which impacts annual returns.

Debt Securities and Investment Types

Mainvest primarily deals with debt securities in the form of revenue-sharing notes. This type of investment can be appealing to those seeking predictable income with a fixed rate of return. However, as with any debt investment, the risk of default or underperformance should be carefully considered. This is typically magnified when dealing with potentially smaller local businesses.

Investment Goals and Original Investment

When investing in Mainvest, it’s crucial to set realistic investment goals and be prepared for the possibility of not recouping your original investment. The nature of the secondary market means that liquidity may be limited, and you might not be able to sell your investment quickly if needed. As such, it’s essential to approach Mainvest investments with a long-term mindset and be prepared for fluctuations in returns.

Final Thoughts – Is Mainvest Legit?

After delving into Mainvest’s business model, investment opportunities, and risk factors, it’s clear that Mainvest is a legitimate investment platform, offering a unique opportunity for individuals to invest in local businesses. Its focus on community growth and portfolio diversification, coupled with adherence to SEC regulations, make Mainvest a worthwhile consideration for investors seeking alternative options.

However, it’s essential to understand that investing in small businesses comes with inherent risks, and the platform may not be suitable for everyone. Investors should conduct thorough research, carefully consider their risk tolerance, and maintain realistic expectations when evaluating potential investments through Mainvest.

Ultimately, for those interested in supporting local businesses and diversifying their investment portfolios with a long-term outlook, Mainvest may be worth it. By investing through this platform, you not only have the potential to earn a return on your investment but also contribute positively to your community’s economic growth and development. Click here to get started today!

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Jeremy Biberdorf
Jeremy Biberdorf

About the Author:

Jeremy Biberdorf is the founder of Modest Money. He's a father of 2 beautiful girls, a dog owner, a long-time online entrepreneur and an investing enthusiast.

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