10 Signs you should Invest in a Startup
“In investing, what is comfortable is rarely profitable.” – Robert Arnott
Every venture capitalist wants to attain a high return on his investment and the nature of investment sector has expanded in the past few years. It now includes small business sectors and startups which are coming up with innovative ideas for the consumers. But investment in such nascent businesses was considered only to be limited to strong venture capital firms or the big investment giants. However, the scenario has changed, with more and more individual investor’s showing interest in funding these Startups.
The nature of investment has completely changed with the introduction of crowd-funding, portfolio funding, and much more. How about funding a Startup which rewards your investment in the long run and provides ownership equity? But then how are we to decide in which Startup to put our money since it involves greater risk too.
Here are some signs that will guide you on how to invest in startup and have better decision making:
- Product Viability: The foremost challenge is to see the viability of the product/services provided by the company in terms of quality and uniqueness. The better the quality the better are the chances of it to withstand the ever changing market scenario. The uniqueness of the product in the market would bring sustainability to the company and is very likely to thrive in the long run.
- Research & Development: R&D is a very crucial fragment of any company and if a startup has allocated a certain expanse of budget then it is most likely to attract the attention of any investor or firm. This assures a cycle of innovation and ensures future market variations allowing new and improved products.
- Ownership and part of change: The investor does not only gain profits from the startup firms by backing them but also acquires a sense of ownership towards it. He becomes part of the company allows the sharing ideas and belief in which he believes. He can contribute to being part of this common goal and provide results for better change for the world.
- Low venture, high returns: A startup does not always require crores of rupees to begin its business. The value of the company primarily based on its past endeavors and potential. There have been examples where a company has risen to success with the small level of investment capital.
- Viable Business Model: Any company who is aware of its business model or plan is capable of creating relevance in the particular market segment. It is essential to lance the product or services market with a well-defined model so that the targeted masses are attracted to and convinced to utilize them.
- Competition & Marketplace: A startups usually enters the small market place and gradually spreads out to another marketplace to build a foundation for its product. Look out for companies that have grown out to create its own image in front of people. This further increases the probability of realization for the startup among the existing competitors when it enters the competitive market.
- Resilient Industry Knowledge: The individual who has full knowledge of the product would definitely accomplish more despite market scenarios. Other key contributors are its team members, who help in implementing the strategies at the precise time and accurate manner. The business has more vitality and niche to become efficacious and no one does that better than a cognizant team.
- Portfolio diversification: Each startup is funded by a number of big & small individual investors with a minimum amount of investment requirements. This offers a unique opportunity to investors to fund different startups at the same time, further diversifying their investing portfolio, and thus lowering the risk of failure or loss. Recent data has shown that how one startup can have many venture capitalists. http://trak.in/india-startup-funding-investment-2015/
- Strong Marketing Strategy: The startup should be able to define its marketing strategy implying its approach towards the ever-changing market competitions. Every day a new product is launched to attract possible target market. The company which knows how to renovate & redefine its market strategy in short time has the potential to withstand the tough competitions.
- Credibility: Startup should have a certain credibility attached to it so that investor is actually enticed to invest their money. The team which holds follow-up meetings on regular intervals with its investors is more likely to show promising results.