As I alluded to in an earlier post, investing in start-ups (aka equity crowdfunding) is now available to the masses. In that post, I developed an idea for an activity where students would evaluate whether they would invest in a mutual-fund like structure consisting of a basket of start-ups. Why not have students just evaluate the individual companies themselves. This could be a great way to get them energized about entrepreneurial ventures. So, how might this activity proceed?

1. Have students (may want to pair them up) browse companies at one of the equity crowdfunding sites. I chose Fundable since they seem to provide quite a bit of information without requiring registration (Angel List and Circle Up are other examples of platforms).
2. Have them select one of the companies (let their interests drive them) and do a deep dive on the details (aka due diligence) including:
   1. Product description: What are they selling?
   2. Size of the market they are targeting with their product
   3. What is their unique value proposition (or How are they better than the competition?)?
   4. Who are their competitors?
      1. How does their product compare?
   5. What is their go to market strategy (or How are they going to get their product to consumers or businesses)?
   6. Strength of the management team (prior successful entrepreneurial experience): In start-up situations, management team is crucially important so they may want to think critically about what they should be looking for here (prior successes, relevant experience, ability to attract other talented people)
   7. If they have other investors, who are they? Angels (small investors) or professional investors (aka venture capitalists)
3. Some of this information is available on Fundable but should also encourage them to go outside the site to collect additional information, such as:
   1. Company website
   2. LinkedIn profiles for management team
   3. Google search on the product they are selling (will help find competitors)
   4. Let them brainstorm about other information that they should be searching for
4. Once they have done this research, they have to make the ultimate decision: Should I invest in this company? Why or Why not?
5. Have them create presentations on #2 and pit students against each other in “Shark Tank” setting.

What do I like about this activity?

• Allows all students to participate in entrepreneurship. Often times students feel stuck when they hear the word “entrepreneurship” as they don’t feel like they have that “great idea.” This makes it approachable as students see the wide variety of entrepreneurial ventures out there.
• Hones critical thinking skills. All collateral produced by start-ups sounds really good. See if your students can cut through the marketing-speak to find the weaknesses and risks with the ventures (they all have them).
• Shark Tank-like presentations teach students to think on their feet and develop a persuasive argument to convince others to invest.

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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