It's clear that startup investing is more than just an emerging trend. Even seasoned investors are looking for funded startups to help their money travel further. Many are investing to help make the world a better place.
But what if you're a novice investor? What if it's your first time looking into startups for investment? Ultimately, no two startup companies are the same. However, it pays to understand what makes a startup so desirable, and what you should look for before you place any money down.
Why Are Startup Companies So Desirable?
The best startup companies are those with great ideas. This much should be obvious. However, there is always a strong element of risk. That's because, as statistics dictate, around 90% of startups might not even make it to IPO.
However, don't lose heart. This can depend on investor strength and the strength of a project manager's vision. Startups are desirable as they will, on the whole, seek to challenge the mainstream more than – for example – an existing operation. A startup is a dream project looking for a cash injection.
However, you're going to need to know that dream project has a strong chance of becoming real. It's going to need more than your money alone to succeed.
What Should You Look For?
Above all, you need to look for demonstrable success. The best startups will have core teams and innovators with years of experience and expertise behind them. They should not only have prototype products and working models (where possible). They should be able to show you through more than mere words that your money is safe – you need to invest in an expert.
Not only that, you should look for a startup with passion and realism in equal balance. Passion is easy to find. Realism, however, is a little rarer on the balance. Look for realistic goals and plans. A startup without a clear roadmap, for example, is one that is going to risk your money.
You should, of course, also be looking for the 'edge.' Does the startup you're investing in have a clear edge in their industry? A worthwhile startup investment does not need to reinvent the wheel. However, they should have a clear inch or two ahead of the competition in niche areas.
Ultimately, it pays to research a startup beyond their initial proposals.
What Are the Best Ways to Look for Startup Companies?
Finding startup companies to invest in is getting easier. Many companies turn to crowdfunding to appeal to everyday people. Services such as Kickstarter and Indiegogo continue to make keen investors of people idly browsing the web.
However, it may be more beneficial to look through a catalog of funded startups. For example, Fundz may offer beginner investors the confidence they need to find the perfect project.
Finding the best startup companies to invest in can take time and effort. While there are many platforms out there willing to help you, the best thing you can do as a novice is – of course – plenty of background reading.
SOURCES
https://brandminds.ro/how-to-evaluate-a-startup-company-for-investment-5-tips/
https://www.valuer.ai/blog/the-top-5-things-investors-look-for-in-startups
https://fundersclub.com/learn/guides/understanding-startup-investments/startup-equity-investments/
https://www.thebalance.com/how-can-average-people-invest-in-startups-4588451
https://www.toptal.com/finance/startup-funding-consultants/what-investors-look-for
