InfraShares Review: Invest In Infrastructure

The idea of investing in a large infrastructure project may seem out of the realm of possibility for the average investor. But that’s no longer the case, thanks to InfraShares -- a crowdfunding platform for infrastructure projects.

With this newfound access, you have the opportunity to invest in infrastructure projects you believe in. If successful, you could enjoy the benefits of creating social and environmental impacts while reaping a worthwhile financial reward. We take a closer look at how the platform works in our InfraShares review below.

What Is InfraShares?

Back in 2016, the U.S. Securities and Exchange Commission (SEC) opened the door to allow the majority of U.S. residents to invest in crowdfunding projects. The move was enacted through the Title III JOBS Act. And it opened the door to big opportunities for investors.

The move prompted Brian Ross and his co-founders to create InfraShares in 2017. The aim of InfraShares is to give everyone an opportunity to access direct infrastructure investment opportunities by pooling funds from multiple investors.

What Does It Offer?

InfraShares offers a relatively unique investment opportunity. Here’s what stands out. 

Infrastructure Investments With Social Benefits

All of the infrastructure investment opportunities listed on InfraShares are based on an ability to provide 'social return.' According to Infrashrares, any project listed on the platform must be able to “general lasting economic, social, and environmental benefits.”

As an investor, you can easily determine which area a particular project falls into. A few of the possible impacts include renewable energy, workforce housing, artificial intelligence, and clean energy.

Project Vetting

All investments come with some amount of risk. But it's important to weed out potentially lucrative opportunities from outright shady deals. That’s why InfraShares runs any potential offering for its platform through a 14-point risk evaluation.

The proposed project must pass the test in three distinct areas. Here’s a closer look at the risk evaluation process.

Compliance Risks

In terms of compliance, the project must:

Financial Risks

Financial risks are also considered. A company must have:

Execution Risks

Finally, the execution risks associated with the project are considered. These include:

If the project satisfies these checks, then InfraShares will invite them onto the platform. This rigorous testing increases your chances of being presented with worthwhile investment opportunities.

Open To All Investors

You don't need to be an accredited investor to work with InfraShares. This means you have access to the opportunities you're interested in without unnecessary hurdles to jump. 

Note that unaccredited investors will be subject to limitations on how much they can invest based on their net worth or income. Investment minimums vary by project.

Illiquid Investments

The companies on InfraShares are privately-held. Essentially, that means you can’t just sell your shares at the drop of a hat. There is no secondary market for InfraShares investments or a defined share redemption program.

In most cases, you’ll either receive a return on your investment through revenue shares, the company going public, or it getting acquired by another company. According to InfraShares, this often takes 5 to 7 years or more to accomplish. With that, you should consider this as a long-term investment option with minimal opportunities to leave on your own schedule.

It should also be noted that the investment opportunities available on InfraShares are high-risk. Providing private seed funding for new or developing businesses is far more risky than investing in the publicly-traded stock of a well-established conglomerate like Pepsi or Procter & Gamble.

Are There Any Fees?

Those who are seeking investment on InfraShares will need to pay a 6% payment fee and a 2% equity fee on funds raised through the platform.

Unfortunately, the company is less clear on investor fees. It's possible that investors don’t encounter fees as this isn't too uncommon on platforms that help businesses raise money. But that wasn't confirmed anywhere on the company’s site.

How Does InfraShares Compare?

InfraShares provides a unique opportunity to invest in infrastructure projects through crowdsourcing. There are few alternatives in the United States; however there are some similar companies in Europe including Citizenergy and One Planet Crowd.

If you live in the U.S., you can access other equity crowdfunding sites like Republic and SeedInvest. Although these companies aren't solely focused on infrastructure projects, they provide similar liquidity and investment mechanics. Here's a quick look at how InfraShares compares:

How Do I Open An Account?

To get started with InfraShares, visit its website and click the ‘Invest’ tab. You’ll find infrastructure investment opportunities here. If you find something you like, then it is time to move forward with opening an account.

You’ll start by providing your name, email, and password. At that point, you’ll be able to link up with your project and funding source. 

Is It Safe And Secure?

InfraShares uses browser encryption and secure procedures for data storage. Only employees with proper credentials can view personal or financial information. Plus, bank-level encryption is provided for all sensitive information.

How Do I Contact InfraShares?

You can reach out to InfraShares via email at support@infrashares.com. Or you give them a call at 1-415-312-2224. Additionally, there is a chatbox on their website, but it may take a few hours to receive a reply.

If you prefer to reach out over social media, you can make contact on Facebook, Twitter, or Instagram @infrashares. 

Is It Worth It?

If you want to invest in vetted infrastructure projects, then InfraShares offers a unique opportunity. You won’t have to track down projects on your own. Instead, InfraShares will do some of the heavy lifting for you.

Often when we review similar equity crowdfunding platforms, we may only find one or two open offerings (or sometimes none at all). But InfraShares currently has 6 open offers (in addition to 7 that have already closed). That's a good sign as it means that the platform is active and investors should be able to compare multiple projects before deciding to invest in one.

However, investing in infrastructure is fraught with risk. Additionally, the lack of liquidity is a cause for concern for money would-be investors. Take some time to review your financial situation and consider whether now is a good time to invest in infrastructure startups or other alternative investments.

InfraShares Features