Startups Blog

How to Find Startups Worth Investing In: An Investor’s Guide

With so many innovative startups and spheres emerging, it can be challenging to know where to start investing. While the road to any guaranteed return is never likely to be smooth, there are factors you can look out for. If you’re new to investing, here are a few ideas you may wish to consider. 

startups investing

 

Look to Fields You’re Familiar With

In the long term, investing in wider fields and spheres is a great idea. However, if you are a new investor, it’s worth looking at what you know. For example, if you have many years of experience in healthcare, why not consider telecare startups?

This initial insight will, at least, give you a great head start in terms of getting to know your client. You’ll be able to understand their five year plan a little easier. What’s more, this can lead to a more mutually beneficial partnership for you both.

 

Look At the Market

 It may be easy to assume that the bigger the market, the less chance a firm has of making a splash. However, the reverse is true. Fringe or extremely niche markets are only going to grow so much. Once you’re the leader in your niche, where do you grow from there?

 Investors should therefore consider looking for innovators that turn existing markets on their heads. What is it that a company proposes to help make millions of lives that little bit easier? Is this a market or sphere that’s notoriously slow to change?

As always, a pinch of salt and some gut instinct is very handy. You need to see that founders are doing their research and that they have practical plans. Unfortunately, fanciful ideas will not make anyone money or change lives, on dream strength alone.

 

Is Now the Time? 

It’s crucial to look for companies that are pivoting at the moment. A few years ago, for example, driverless car ventures may have seemed risky. That’s because the research and development were still in their infancy.

As an investor, there’s a need for you to weigh up current demand, future demand, and technological practicality. If many of these factors are too far down the line, your prospect runs on faith rather than factual data.

It is all about assurance. Ask to see data and research from your prospective founders. It never hurts to ask these questions, especially if it is in a sphere or industry you are just starting in. 

The best ventures and innovators can and will confidently demonstrate why now is the time for you to invest. Hesitation can be highly off-putting to investors. That’s why you not only need to look for confidence but also demonstrable insight.

 

Do All Startups Follow The Same Roadmap?

No - all ventures are very different in this regard. Therefore, enter into investing with an open mind and an open heart.

Two of the best things you can do right now are as follows. 1) take a look through Fundz’ latest records, and 2) be prepared to ask as many questions as you need. Finding the perfect investment for you will take time, nerve, and planning.

 

SOURCES

https://www.forbes.com/advisor/investing/invest-in-startups/

https://about.crunchbase.com/blog/how-to-find-startups-to-invest-in/

https://www.valuer.ai/blog/8-ways-find-startups-to-invest

https://medium.datadriveninvestor.com/how-to-determine-if-a-startup-is-worth-investing-in-3d11b92fd8b2

https://jonathanhung.com/9-questions-to-ask-a-founder-launching-a-startup/

 

Topic: Startups