Interested in the idea of a particular startup and want to invest in it? There are risks, but the return could also be lucrative if it is managed well. Let’s see some of the points to be considered while investing in startups!
For most matured companies, they’ll prefer cash as investment for they are already strong and stable. However, for startups, if your time and skills are as valuable to help the company grow, most will accept that as the currency instead!
When you sign an investment agreement, you should set your own conditions. If the company is unable to fulfil these conditions, no transactions will be involved, which helps reduce the financial risk you’ll bear.
There are startups in almost all sectors. Hence, if you are planning to invest a lot while reducing the risk of putting your egg in one basket, the smarter move will be investing in various startups.
Startups often have a lower valuation when they first look for investment. Hence, the value you get from this investment will be lower than other kinds of investment. At the same time, investing in startups can make you become a major shareholder in the startup in the future if they are successful.
No matter how good it may sound, investing in startups has its own risks:
Have any startups in mind now?
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