12 reasons why you should invest in startups

Have you ever thought of investing in startups? Why do people invest in startups? Well, It is a good idea to invest in startups when one has the appetite and the capacity for the high risk involved.



Here’s Why You Should Invest In The Startups


1. Higher Returns on Investments

Thoughtful decisions of investing in the startups can be hugely favorable as the returns (above inflation) are higher than other types of investments. Moreover, it diversifies your portfolio investments.


2.Recognition In The Market

The startups you have chosen if, in the upcoming future, get recognized in the industry. Then, this recognition acts as a catalyst for your popularity too as you are directly linked to the organization.


3. Lifetime Savings

Besides receiving returns, the investment is done to secure one’s future. Many investors seek companies who are thriving and expanding in the sector.


4.Create Changes in a positive way

Green financing is a nascent investment type, which is highly prevalent in the sector. Millennials contribute to the startups which envision bringing positive changes in the society. By opting for green financing, you can become a part of the positive societal changes done by the institution.


5.Reap the benefits of getting in early

Getting Early investment leads to compounding returns. The value of money will increase with the time period. Regular investment made right from an early age can give you a huge profit or benefit for a long time.


6.Become an essential part of a team

Investors of startups and smaller firms tend to take on more active roles in advisory and management than those of more accepted or publicly exchange companies. Once an investment decision is made the investment team makes a number of other choices. Another reason, though, is due to a legal need of many companies and entrepreneurs for mentorship, industry connections, strategic management, etc., which go far beyond simply providing funding. Investing in a startup will give you a voice and a position to be an essential part of the most ensuing decisions the company will make in the future.


7. Start innovating again with fresh and enterprising entrepreneurs

The entrepreneurial spirit rarely leaves a person once it settles in, and any aspiring or former entrepreneur can attest that there will always be a need to scheme, to problem solve and to create. If you’re a possible investor who is looking for a way to experience the thrills of running a startup, cooperating with other entrepreneurs to provide your own especial intuition and opinions in addition to funding can prove to be a great way to make peace with your need for decision-making.


8. Isolate yourself from market trends by diversifying

It is well-known that continued diversification of your portfolio improves its overall production and introducing private equity and venture capital into the mix is a powerful method to do so. The performance of startups are less likely to be influenced by macro-level market shifts, in part due to their ability to pivot, and so there is often little correlation between early stage private companies and the behavior of the overall market. Hence, keeping at least a small portion of your portfolio in startups can help reduce risk while increasing returns.


9. Investments are used to bring some good

Investing in startups can yield more intangible benefits as well, specifically for socially conscious investors. Startups are of course on the crux of problem solving and innovation, fueling the discovery and popularization of life-changing solutions that larger firms were unable to envision or bring to market. As an investor, you can have a serious impact on the success of those products and services which benefit the lives of their consumers or produce positive externalities for society at large. There are few other ways to create such a profound impact in the lives of others while also acting in your own rational self-interest.


10. More jobs are created through investments

A surprisingly high number of jobs created come from companies that are less than five years old — in fact, in the United States, new firms have created a net average of 3 million jobs while existing firms lose 1 million annually. Getting involved in startups puts you in a place to support this tried and true method of job creation, once again producing positive externalities to benefit the countries your startups operate in as you diversify your personal portfolio.


11. Investment provides steady income or profit.

The most important reason we invest is that there is a clear and present path for high return on investment, in a short period of time. If you are cash flow positive, then this is extremely good and will close a lot of folks on this fact alone.


12. Product and services are loved

Especially if you are pre-revenue, we have to resonate with what you are doing on a level. Either you are solving a problem that I happen to have, or I’m so wowed by what you are building that I want to be the first customer and participate in the company’s upside. In other words, your avid customers are your best investor leads.


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