Looking to Invest in a Startups - Idea OR Co-founder ?

Fifteen years ago, the funding landscape for startups looked entirely different. Through the development of new startup funding options, entrepreneurs now have more ways than ever to get their idea off the ground. And just about anyone can invest in the next unicorn if they play their cards right.

The rise in new, non-traditional funding options allows entrepreneurs to evade traditional VC fundraising and consider a whole new class of investors who can spark innovation and keep the lights on.

Here are my tips for investing in startups in the 21st century:

Investing in startups is trending, but the million dollar question is how to generate outsized returns?

For some of you reading this, $1million may just be chump change. But imagine if you had invested long before the IPO? How would that make you feel right now? What would that do for you?

Even Mark Zuckerberg’s net worth has been trumped by Uber founder Travis Kalanick, at $6B as of 2015. But as a startup investor you don’t have to be the founder, and do all the work to experience viral investment returns.

With that in mind, I wanted to share what I believe are best ways to invest.

As a disclaimer, while there are best practices to follow when venture investing, before making money, it is likely that you will lose a bunch. Investing in early-stage startups is truly an art and like leading Venture Capital firm First Round puts it, “there’s no such thing as a formula for success.” But instead of going at it on your own, it does help to leverage investing platforms and mentor advices that offers highly curated, direct investment opportunities that are deeply vetted.

Following are few strategic tips for investing in either of the options Idea or Co-founder

1. Smart Startup Investing : Invest Smart, Efficiently & Profitably

• Investing in pre-vetted startups
• Take a portfolio approach and invest in a number of deals
• Reserve a portion of capital for follow-on rounds
• Invest in what you understand
• Invest in startups you may be able to add value

2. Intelligent Diversification

Will you deploy Ron Conway’s ‘spray-and-pray’ strategy, or Peter Theil’s ‘all-in’ game plan?

One of the most common pieces of advice thrown around the investment world and internet today is to intensely diversify.

Though theoretically ‘spray-and-pray’ is likely to produce a whole portfolio of flops. On contrast that with focusing on more highly curated startup opportunities with potential for success. Simple example that we have before us is Andreessen Horowitz investment of $250k in Instagram. Two years later it was bought for $1B by Facebook, returning a 312x return, or $78M on that initial $250k. If you had been one of the early investors in Facebook, or Uber, none of your other investments would likely even register on the scale in comparison.

That’s understandable given the volatile nature of startups, and the rarity of Facebook like success stories out of the 600,000 plus new small businesses incorporated in the USA each year.

3. Invest in founders first, and ideas second

The idea of investing is exciting and daunting all at the same time. As a first time investor, how do you know where to start? How do you make a savvy investment that keeps the roof over your head and makes money in the long run?

Seems like a gamble -- and it can be if you're not smart about where you put your money. Remember that about 90 percent of startups eventually fail, which means your investment might have the same trajectory. It's easy to get excited about a cool, innovative new idea. But, who are the people steering the ship?

In my recent consulting experiences have seen few most successful startups and few failures as well, each company that i offered by services, I have gone through an intense analysis and understanding of the business and founders. There are plenty of startups with great ideas coming to the table every day, but what i have observed was investments flown were only with founders value more than Idea. If there's a strong leadership at the helm of a good idea, they have the best chance to execute on their mission.

Finally investing in yourself might sound cliché, and it is, but it’s a bet that could absolutely pay off. And if you want to make the most of your investments this year, betting on yourself is one of the smartest moves you can make.