How to Invest in a Startup that is Not Your Own
Finding the next Facebook
Ever heard the story of David Choe, who invested in Facebook early days when it was small, and now his shares are equal to 200 million overnight? If you are in the angel investing business and looking for startups to invest in, You might need criteria that will filter out many bad business ideas, especially when you say NO many times; you need to know when you can say YES.
The risky side of startups
Let’s face it, so many people out there love the idea of creating the next unicorn startup like what happened with Uber, Zoom, Facebook, and many other startups.
But the problem arises when many people start in this because of the numbers they hear and how rich they can be. But some of them give up in the middle of the road, or they don’t have a solid idea of the startup itself.
For example, when Uber was founded, it was a problem when the founders Travis Kalanick and Garrett Camp couldn’t find a taxi in Paris. And it didn’t start as uber as we know it today and only started by getting professional drivers to drive limousines where you can order them by the application. My point here is you should focus on people who are making their startup based on personal experience.
What startups you should be looking for
- Startups that already had a good start without funding are often a good indicator.
- Stay away from people who will spend the money on fancy offices and hire a lot of people.
- Always think if a startup is relative now or not. Because sometimes, the market isn’t ready for a certain startup.
- Invest in people and not just the startup itself. And by that, I mean the founders themselves are the most people you should focus your attention on.
- Investing in private companies is where big money is made.
Contacting the startup
What’s left now is to search on LinkedIn or network the type of startups you want to invest in. Searching for startups between 1 year and 3 years would be good. All you will need now is to use a tool called GetEmail.io that only needs the first, last name, and domain name, and you will have the email of the person you need to contact. This tool is also free when you sign up, but you will be limited in the number of emails you can get. Other paid plans give you more credits so you can get more emails.
Winning each time
It would be best if you were prepared each time you invest that you could lose that money. All you need is to win ONCE and not each time. When you do win a couple of times, you will get an idea of what works and what doesn’t.