These days startup investing has become very easy for retail investors. Thanks to platforms like Republic and Wefunder. These are some for the popular startup funding company which allows crowdfunding to their people. Anyone can start their investment journey at as little as $10.
Startup investing has become very popular these days because many unicorns company were startups in their initial days. Now, we can see many companies listing themselves in the public market as well.
In the hope to make a huge sum of money, many retail investors are attracted to startups investing. It has also helped many small businesses to raise funds to thrive in this competitive world. There are thousands of interesting startups that have come up with interesting ideas across the world. There are lots of advantages to investing in these startups.
Social Capital
Most of the startup has come up with unique ideas to solve certain problem. They have high potential to change the lives of people and to bring something new in the society. So, investing into this startup is like investing in the society and innovation.
Whatever, the money you will invest they will utilize that money to create something valuable for people. For example, there are many health-related startups. Who is working on creating a product which could save millions of lives?
Liquidity
The startups have high liquidity as compared to other investing platforms. When you invest in some startup either it is from a crowdfunding platform or directly into a startup.
You will get some share in the exchange for invested money. After you invest in the startup you will have very little chance of converting that share into cash. You can’t sell that share unless it is listed in the startup or unless it is merged by some big company.
Many investors need to stay invested in companies for years. The long-term investment gives huge profit to the investor in every business. Similarly, investing in startups forces investors to invest their money in the long term.
High-risk high reward
Investing in startups can be risky because very few companies make their way into the public market. However, the more risk you can afford the high reward you will get from it. Garry Tan’s had invested $300,000 in Coinbase in 2012.
When the company was listed in the public market her investment was valued at $2 billion dollars. It was 6000% gains from her invested amount. A startup investing is not for everyone if you have a proper idea about business, investing and ideas then you can go. But, it is not recommended for everyone.
Also Read, What is entrepreneurship? Different Types of Entrepreneurs