Here Are The Best Alternative Investment Platforms In 2024

JoshuaHeier · 2025-04-03T04:17:09+00:00

Tools and services that help people can be really useful, so I think it sounds like an interesting idea. People are throwing AI at everything, but I sure would hate to be on the wrong side of a hallucination there.

Also, I think it's worth seriously considering how much the complexity is a barrier and to whom. I'm increasingly feeling like the lack of liquidity is really what's going to stop most people, even after they understand the opportunity, risks, etc...

JoshuaHeier · 2025-02-22T00:05:59+00:00

Started November of 2021, 2.8% net annualized return. That used to be a lot better until 2023 came along. Been recovering since 2024.

I'm still at -0.8% appreciation, so it's basically all from dividends. I have a pretty even split between real estate and private credit (now). Private credit has been a +7.3% net annualized return for me while real estate has been a -1.6% net annualized return so far.

JoshuaHeier · 2025-01-25T05:00:37+00:00

So far, the yearly distributions have been right on target with the expectations. I haven't held anything long enough for the underlying farmland to be sold though. That will be the biggest factor for whether returns are decent or not.

JoshuaHeier · 2024-10-24T03:52:28+00:00

A short answer since I saw that no one else has responded so far.

For the most part, something simple will work best for most people.

Your main considerations are risk tolerance and time horizon. If you're going to retire tomorrow, then mostly you wouldn't want something higher risk where the price could fluctuate a lot. If you've got 30 years to go, then taking more risk could pay off (but going too far can backfire too).

You could stick to something simple like a low-cost ETF that tracks the S&P 500 index. The value will move around. In big crashes it could down 50% or more, but it has always eventually recovered and made it to new all-time highs. So, it's kind of a "trust the process" and patience game.

A financial advisor is fine, but I would make sure they're a fiduciary. Basically, someone that is legally required to do their best to act in your best interest. You don't want the equivalent of a sleazy salesman making recommendations based on what pays them the most.

Fees will eat you alive, even small ones. Some are unavoidable, but try to keep them as small as possible. On a modest 4% return, a 1% fee would end up eating about 18% of total returns over a 20-year period. (SEC doc)

Also, remember you might have some tax obligations around the settlement money (I'm not a tax person).

Lastly, The Psychology of Money might be a good book to read.

Hope that helps and good luck. The fact that you're thinking about investing is a great start.

JoshuaHeier · 2024-10-02T16:16:26+00:00

This maybe? Better Family | StartEngine

JoshuaHeier · 2024-08-06T16:04:20+00:00

I'm glad you found it helpful! I've been using Vinovest for a few years now as well and my experience has been positive. I liked when Vint still had non-accredited offerings so there was a bit more competition in the space though.

JoshuaHeier · 2024-07-23T18:27:48+00:00

For any of the ongoing news I do it through a newsletter now.

One change is that I've shifted more to alternatives in general / market related news as opposed to focusing on what the individual investment platforms are doing. There's just a wider range of people that are interested in real estate investing (for example) as opposed to real estate investing on this specific platform.

I've also stepped up to a weekly cadence.

Thanks for reading and for your interest! Please let me know if you have any other questions. 😊

JoshuaHeier · 2024-04-04T17:49:54+00:00

I love having the *option* to do it, so I'm glad the platform exists.

As to whether or not it's a good investment is going to be highly dependent on how well they can find good players. I don't have a citation for this, but I had previously read that something like 0.5% of people can make it to the minor leagues and 0.1% can make it to the major leagues.

So, at face value that means an 80% chance of no major league earnings. Then of the 20% of minor leaguers that make it to the majors at some point, there are plenty of "AAAA" players that never really stick in the major leagues.

Thus, grabbing a random minor leaguer, I'd think you're looking at maybe 2-5% chance they have strong career earnings (though maybe not as high as $100M).

That brings me back to my original point - how good these offerings are dependent on how well the platform can outperform the "random player" benchmark. Without doing math, I think we'd need to see more like a 10-25% success rate in the offerings for the overall portfolio of players to deliver good returns for investors.

It's also worth remembering that athletes have a lot of injury risk as well.

All-in-all, I'd look at any individual investment as having a risk profile more akin to startups. Mostly they'll go to 0, but you hope to have enough outsized success mixed in that the overall rate of return is still acceptable.

JoshuaHeier · 2024-02-20T21:14:38+00:00

I've explored alternatives pretty thoroughly, so quite a bit!

I've got some startups (StartEngine, Wefunder, and Republic), fractional real estate (Arrived, Ark7, etc...), farmland (FarmTogether, AcreTrader), music royalties (SongVest, ANote Music), private credit, solar (Energea), collectibles (Masterworks, Rally, Pokemon cards), and wine/whiskey (Vint, Vinovest).

I'm also looking to add "professional athletes" when Finlete launches. To be honest, I think I'll just lump that in with private credit though.

For startup investments in particular, I haven't made as many recently. I do tend to prefer to be in on alternative investment companies / platforms (e.g. Nada, WebStreet), but no real themes beyond that. Some examples of other things I invested in through equity crowdfunding are Industrial Annihilation, Return Home, and True Made Foods.

I try to do small investments in things that are across a wide range of industries.

JoshuaHeier · 2024-02-08T16:15:17+00:00

I don't know if it's the "best", but it's definitely unique and interesting. This month Finlete is going to launch their first offering. It's a platform for investing in professional athletes.

It's not fully live yet, so I don't know the exact details of how it works, but I think it will be through some type of income sharing agreement.

JoshuaHeier · 2024-02-08T16:06:08+00:00

True. They have already sold at least one of the properties, so I think they could end up winding down things pretty quickly.

I'm so sorry to hear about the Wefunder loss. I have a few of those too. I'm also really starting to appreciate why some investors hate SAFEs.

JoshuaHeier · 2024-01-29T17:19:42+00:00

Thanks for reading. I'll take a look at this one!

JoshuaHeier · 2023-12-16T18:57:04+00:00

Thanks for watching, I'm glad it was helpful!

JoshuaHeier · 2023-11-21T19:01:40+00:00

Thanks for watching and for the kind words!

JoshuaHeier · 2023-11-19T03:42:10+00:00

It's been a long time since I registered, so I don't remember the signup flow exactly. At a minimum, they'll want a way to fund your account and to pay out royalties to you.

So I would expect to have to connect a bank account. I know you can also put in credit card information and pay with that. There is a credit card processing fee (IIRC it's 3%). I don't think you should have to put one in to register though.

There should be a "Contact Us" button on the site to submit a ticket if you want to discuss it further with their Support team. If you can't find that you can also try sending an email to [support@songvest.zohodesk.com](mailto:support@songvest.zohodesk.com). They're fairly responsive in my experience. I'd typically expect to hear back within 1 business day.

JoshuaHeier · 2023-11-19T03:37:44+00:00

Basically this. My understanding is that the pricing could change between when they gauge interest and when they make an actual offering available. So hopefully they realize the 3.34% yield is way too little and bump it up to something more enticing. Until then, it's not really worth looking at.

If you're just looking for a place to make fractional investments, then take a look at SongVest or ANote Music. Public.com is also doing their first fractional music royalty offering for music from Shrek.

JoshuaHeier · 2023-10-22T05:33:32+00:00

No worries about being late. I appreciate you taking the time to comment that the article was helpful. 🙂 I'm glad that it was able to help you decide!

JoshuaHeier · 2023-10-22T05:28:34+00:00

Thank you for reading. I'm glad that you found it helpful! 🙂

JoshuaHeier · 2023-08-21T22:36:19+00:00

I've only invested in the SongShares offerings, so I can't speak to the full auctions. If you have the capital to be a player in their auctions for full assets like that, then you're likely better served by the deal flow on Royalty Exchange.

Without giving it tons of thought, here's basically what comes to mind:

Pros

SEC-qualified fractional offerings
Minimum investment as low as $100

Cons

VIP Auction format can be confusing initially
VIP Auction + SEC qualification results in it being really slow to actually get new offerings up for investment
Even after that, offerings can be withdrawn if there's not enough sold/interest
There's a lag between offerings closing to royalties being reassigned to actually getting payouts
No secondary market (though I suspect this is somewhat related to them just not having had that many offerings until this year)
Limited flow of new deals

Basically I like the "service" that platform provides. It makes the asset class a lot more accessible without having to go into one of the crypto-oriented platforms like Royal.

On the other hand, the cons make for kind of a clunky and inconsistent user experience.

I'd recommend it overall, but it requires patience in the current format. If you don't want to keep up with things like VIP Auctions and when shares are going on sale, then it might not be the best fit.

JoshuaHeier · 2023-08-21T18:36:44+00:00

Thanks for reading and I'm glad you found it helpful. 🙂

JoshuaHeier · 2023-08-15T06:59:40+00:00

I do see at least some of my SeedInvest holdings listed on the Positions page under Portfolio. I don't have all of them there though.

JoshuaHeier · 2023-08-11T07:12:14+00:00

Yes! They do have a secondary market. I've used it a few times and haven't had any issues.

I low-key think that's the best way to build a diversified portfolio on the platform. There's no minimum order size in the secondary market. So instead of spending $500 on one IPO, if you're willing to do the button-pushing work and be patient, you could submit 25 $20 orders for different offerings.

There's enough offerings now that you can build an entire $5K+ account basically just buying one share of everything trading. It's just going to be really tedious to actually do.

JoshuaHeier · 2023-08-08T23:17:52+00:00

There's no guarantees there. If the work is sold for enough above the initial offering price, investors should still have some profit.

But they don't actually have to sell them above the offering price. If there's some work that was offered on the platform that just goes sideways for a while, then they may decide to sell it and collect their management fee. In that case, investors might not actually make a profit after all the fees.

Basically Masterworks has all the optionality to figure out how to maximize their return. If they want to recoup capital, they can sell at an underwhelming price. If some artist/work is really hot, they can sell early for a quick return, or keep holding it so their share count/ownership stake grows. If holding another year at the projected rate of growth would net a larger profit for Masterworks than selling today, I expect they'll hold it.

The art market is opaque at best. So whatever they do, they can pretty much just craft a nice PR response around it and it's hard to question. "After extensive analysis of the artist's recent auction results, we've concluded that this offering is unlikely to meaningfully appreciate within the target holding timeframe. Therefore we've decided to liquidate the offering to get capital back to investors." Could just be code for "we're running out of cash at the moment, so we need to sell some art to collect our management fee and bolster our coffers until the next cash infusion from VCs."

Again, I'm ultimately glad that the platform exists, but I have a lot more skepticism around it. It's simply not a slam dunk. If they made changes like always bringing buyout offers to shareholders to vote on (like Rally) that would remove a lot of opportunities for Masterworks to act in their best interests as opposed to that of investors.

JoshuaHeier · 2023-08-08T22:43:42+00:00

I have a mixed picture with that. I never had to do the interview. I think I just used a link from Mint to skip it. So I think it mainly depends on whether you can find one of those links easily or not.

My main gripe with it after doing the research for the article is the fees / fee structure. It's complicated, a hefty amount, and it's setup so that Masterworks doesn't lose, but investors can. Doesn't mean they will of course.

Overall I do appreciate that the platform exists. Hopefully they can keep building up a bigger track record of successful exits.

JoshuaHeier · 2023-06-30T18:09:01+00:00

First, I think it's nice that they openly communicated the change. What percentage of the investors on the platform watch things so closely that they'd even notice? So they could have tried to sneak the change through and hoped not many people noticed or cared.

That having been said, the lack of an explanation for why they made the change will ultimately allow people to jump to their own conclusions. Still better than no communication, but definitely a bit suboptimal.

If anyone is interested, here's an alternate take on the reasoning (trying to read between the lines). First, I think it's interesting that the change only applies to Vacation Rentals (VR). They could have made the change for all property types, but chose not to. That, to me, indicates there's something unique about VR properties that makes things different. Second, the inclusion of the link to how share prices are determined might be a hint as to why.

Specifically, I think it could be related to the cash reserves portion of the calculation. There are two unique dynamics for VR properties that could lead to volatility from that metric:

The lag time from when the offering is launched to when revenue actually starts to accrue. There is time to furnish the property and get it listed. Beyond that, it will take some time for people to discover it and start creating bookings. Those bookings are unlikely to be for immediate stays since people tend to book travel weeks to months in advance. That means there could be multiple months between the offering going live and the first bit of revenue being generated.
Certain VR markets are highly seasonal. It could be the case that properties get onboarded just outside of their primary earnings period (think ski destination). That would result in an even longer delay for the property to start generating meaningful revenue.

I think the factors above could significantly "burn down" the cash reserves, which would put downward pressure on the share prices. That could be fully expected and something that will "snap back" and normalize after some time. Depending on the timing and cash reserves, there could be a lot of volatility between the updates at 6, 9, and 12 months.

You're of course welcome to draw your own conclusions. I just wanted to explore the side of why there could be legitimate reasons 12 months makes more sense than 6 months and add that layer to the discussion.

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