Seven Tips for every new Start-up Investor to follow - By Anil Goyal

Seven Tips for every new Start-up Investor to follow

Deciding whether or not investing in a start-up is worth it can be a strenuous task to do. When you plan to contribute your earnings to the success of a potential venture, you invest many other things apart from mere money. You need to give unbiased advice to the founder if they are new entrants in the industry and require guidance for important business matters. Thus, giving your valuable time and effort into something that doesn’t carry a guarantee to reap fruits can sound scary. But don’t worry, as an investor, you have to make a start somewhere. So if you are enthusiastic about investing in early-age start-ups, check out some easy tips and pieces of advice we have discussed below. Scroll down and take a quick read.?

Strategies for a promising start-up investment journey

You want your investment journey to be insightful and full of learning. Keeping in mind some of the strategies listed below will make a great difference as you embark on building a strong investment profile.

Conduct the test of due diligence

A convincing funding proposal can be enough for you to do away with all your doubts and second thoughts and invest in the start-up right away. But take a deep breath and don’t make haste at this stage. You have heard the founder’s pitch and his/her side of the story. But have you done your research yet? If not, you should get into the minute details of the start-up. Assess the capital structure and whether the start-up has the potential to pay all the debt. There are a lot of technical areas to check upon and it is a good idea to approach a lawyer if you yourself aren’t well-versed in such subjects. Overall, the start-up should be capable enough and largely diligent so as to prove worthy of receiving investment.?

Go for a diversified investment portfolio

You should never make your investment profile monotonous and mundane. If you don’t risk it, how will you level up? We obviously don’t recommend you hurry and invest in varied places without giving it a thought. But try to be a little experimental and diversify your investments. If you find a start-up attractive, don’t just decide on spending all your funds on it. Carefully divide your reserve and invest some funds in each of the five different start-ups. This also helps to counterbalance and cover the loss of any one start-up investment.?

Give marks on the pitch

How the founder of a start-up presents a pitch to the investor to seek investment is absolutely essential and hard to neglect. The pitch largely shows the commitment, determination, and business values of the individual. The right team is a prerequisite for success, and you should gauge the people you are going to sign a deal with before finalizing everything.?

Be updated with the start-up’s regular affairs

There is so much news about how different companies are doing and an ideal investor should be aware of what is going on. You must be updated with the internal and external affairs of the start-up you are going to invest in.

Focus on the long term

If you feel that a particular start-up investment is worth it because it will give you returns in the first few months itself, you are mistaken. Your choice should be based on what you are going to get from your investment in the long run.?

Be mentally ready to take failure

Let’s accept the harsh truth that investments can either give you profit to enjoy or loss to bear. The chances of negative returns are equally high and you should condition your mind for the same. If you incur a loss in one investment, don’t restrict yourself and call it an end to your investment journey. Every mistake will give you the experience to add to your reservoir. Use such experiences to learn and prepare for the future.?

Seek professional advice

It is completely fine to approach professionals for advice if you feel you are not able to make a decision yourself. You might take some time to become a professional investor who can decide where to invest. Until the time comes, take it slow and be open to taking advice at every stage.

Wrapping up

Every professional and experienced investor started as a beginner at some point in time. Now is the time for you to make a smart start to your investment journey. But it is always better to be careful whilst choosing where you want to invest your hard-earned money. The choices you make in your investment journey are going to impact your portfolio in the long term. So do your research, take advice, be open to wise suggestions, and make your decision.?

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