When it comes to investing money people need to use extreme caution, and really know what they are getting themselves into, especially if it involves investing in private companies. Scam artists plague the investment and securities world and many people are taking risks they cannot afford.
The BC Securities Commission recently issued this warning to would be investors:
"The BC Securities Commission urges people to be very wary about
investing in private companies because these types of investments are
high risk (meaning you could lose all of your investment). As well,
people should understand that it is difficult to get their money out
until the company is either sold or goes public. Even when resale is
possible, investors may not find any market for the shares they acquired when the company is private. Unlike public companies which file a prospectus with a securities regulator and provide ongoing information about their operations, private companies are not required to provide the same amount of information nor do they have the same level of regulatory scrutiny.
This market is an important source of venture capital financing in our
province. But investing in private companies is not for everyone. We
recommend that seniors and unsophisticated investors be particularly
careful when considering such an investment. Get a second opinion first
and do your homework."
~ Patricia Bowles (Director of Communications & Education; BCSC)
When it comes to investing you need to do your homework. For information on how to choose an investment advisor and to see if an advisor is registered or has been disciplined visit the InvestRight website at http://www.investright.org/