A
This question is just a bit trickier than this one: What kinds of returns can I expect as a equity crowdfunding investor? so just in case, we suggest you read it first.
In a similar FAQ we broke down what 'types' of returns you can achieve from a crowdfunded investment, they are capital gains, dividends and interest payments. Now let's talk about 'timing'.
Interest Payments 📅
The "simplest" type of return in terms of timing are interest payments. When a fundraiser crowdfunds a loan or a debt-type security, they may indicate a regular interest payment period (quarterly or annually, for example). Not making these regular payments are usually a term of default, so fundraisers are keenly aware of this responsibility.
Dividends 🗳
Then we have dividends- some companies can have dividend policies or a form of profit sharing agreement with investors like yourself. However, if the company or venture can't earn revenue, then you will likely not recieve a dividend. Dividends can be payable in regular intervals as well.
Be aware that some companies may not pay dividends at all in the short or medium term- instead, preferring to reinvest all company profits back into growing the company. Make sure you understand if the type of business you invest with is the type of business that aims to pay out its profits as a dividend.
Capital Gains 📈
Finally, there are capital appreciation returns. We're sure you've heard of some investors making it big being early-stage investors in startups that have gone on to "unicorn" 🦄. These high-growth-potential businesses have become incredibly valuable in terms of size and scale. These kinds of companies seek investor funds to get to that goal as quickly as possible. However, all businesses entail the risk of failure, some more than others. There are many other examples of companies that have failed to hit targets because of events outside of their control (like a global pandemic).
The ability to realize capital appreciation returns from a company at a higher value than what you invested, is almost solely based on business success and not timing. In other words, don't expect higher valuations to occur just by waiting.
Please be advised that these forms of returns are not guaranteed, even regular interest payments are subject to default and insolvency risk on the part of the business itself.
✋RISK WARNINGS ✋
Crowdfunded investments are alternative investments and are thus generally considered high risk and speculative in nature. You are likely not to recieve dividends or regular income from such investments. There is a substantial chance that you may lose the entirety of your investment. Fundraiser and campaigns listed or eligible for listing on the Round One platform are not endorsements by Round One regarding investability and may not be construed as financial advice. We caution you to speak to your financial advisor on how to best allocate your portfolio based on your needs and objectives.
For additional information, check out our Risk Warnings.