why it is good for investors to invest in a startup

Investing in Startups: Why it’s good to invest in a Startup

The Startup world is like a marathon with entrepreneurs running with all their passion to achieve their dreams. When it comes to keeping up their energy, they need money. Money that can keep the machinery running.

Investing in these ventures allow you to reap from a source which is yet in its infancy. This is probably always a good idea if you know how to take calculated risks.

“ Never depend upon single income. Make investment to create a second source ”

Warren Buffet

Being an investor means being a financially fit person. Banks are also supporting investors with crowdfunding platforms. These platforms act in collaboration with several investors independent of their participation financially and help startups with the overall benefit.

Now, the question is, “Is being an Investor helpful?”.

The answer to this depends on the return investors get after investing in a startup. So, let’s shed light on the reasons why its good to invest in a startup.

Why it’s good to invest in a Startup?

Promised and Improved Returns

Investing in startups assigns your money a mission to help the company. In return, you get a promised growth (if done right) in your investment. And these returns are considered an ideal source of income. 

According to the Internal rate of return (IRR) data, the invested cash is promoted about 2.5 times in four years. Apart from the profit earned, a part of the investment generates slow outputs making it promised but delayed earning.

Portfolio Diversification

Today, investing in startup companies is becoming more promising and secure. Besides, investing helps Innovative startups to be recognized at the world platform. Also, investors get the opportunity to be a part of this success.

A major benefit is that investing in startups provide portfolio diversification for investors.

Making Companies Your Partner

Being an investor in a company makes you a part of their foundation. Investors of startups and smaller firms tend to take on more active roles in advisory and management than those of more established or publicly traded companies.

That’s simply because getting in early gives you a higher proportion of voting shares.

Opportunity to be an Influencer

Investing in a startup will give you a voice and a position to be an integral part of the most important decisions the company will make in the future.

Another reason, though, is the genuine need of many companies and entrepreneurs for mentorship, industry connections, strategic management, etc.

Investing Promotes Global Good

As an investor, you can have a serious impact on the success of the products and services. This, in turn, benefits the lives of the consumers and delivers positive externalities for society at large.

Investing in startups yields more intangible benefits, specifically for socially conscious investors.

In short, investing in startups is a good way for investors to have financial and social growth. 

Share with us your views and thoughts on whether you would invest in a startup in the comment section below.

Also, if you want to know more about the startup ecosystem, read our articles.

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