If you’re looking to invest in exciting companies that have the potential for explosive growth, then startups present an ideal opportunity. Today’s startup environment has plenty of room for novice investors. As long as you’re willing to accept some risk, you can put your money toward funding startups.
Startup investment platforms represent one of the main reasons why startup investing has become more accessible. Even non-experts can use these systems to identify promising companies and make significant investments. The key is to find the best startup investment platform that meets your needs as an investor.
What is a startup investment platform?
A startup investment platform is an online service that curates a list of startups and helps them find investors. The best platforms receive thousands of petitions from companies looking to be listed on the service. The platforms assess each of these companies to decide which are worthy of a place on the list.
Investors can use the platforms to invest in startups of their choosing. Each platform sets a minimum initial investment, but for many sites, the threshold is only $100. That means even small-time investors can use a platform to participate in startup investing.
Benefits of startup investment platforms
There are several reasons why first-time startup investors should start out using a platform for their investments. First of all, the fact that the platforms have a thorough vetting process lowers the general risk of the investment. While there’s still no guarantee that the venture will prove successful, you can still be confident that certain levels of professionalism and competence have been met.
Platforms have the additional benefit of bringing a high number of startups together in the same place. If you’re not an insider in the startup world, you need some way to learn about investment opportunities. A startup platform makes it easy to identify, assess, and compare potential investments. Once you’ve chosen a company to invest in, you’ll also be able to use the platform to carry out transactions. All of this would be much more difficult without the institutional support that a platform provides.
How to choose the best startup investment platform
To maximize your chances of success in startup investing, you need to pick the startup investment platform that best meets your needs. The choice of platform is the initial decision that will lay the foundation for your experience as an investor. If you make the right choice, you’ll have an easier time comparing companies, analyzing potential growth, and opting for wise investments.
There are a couple of things to consider when looking for the best startup investment platform. First of all, you need to choose a service that’s appropriate for your current level of financial security. Second, you should find a platform with a website interface that you’re comfortable with. If both these conditions are met, you’ll be able to make the most of your time as a startup investor.
Financial stability
Investing in startups can be amazingly lucrative, but it’s also somewhat risky. Compared to safer investments like bonds and stocks, startups are relatively likely to fail. Once you’ve committed your money to a venture, there’s no guarantee that you’ll ever get it back.
With this inherent risk in mind, you shouldn’t invest more in startups than your finances can handle. Take a long, hard look at your financial security, and determine how much money you can safely afford to invest. Then, look for a startup investment platform with a minimum investment threshold that falls within your budget. Signing up for a platform that demands excessively large investments could seriously derail your financial security.
Website interface
A startup investment platform is only useful if you feel comfortable navigating the website. An unwieldy interface can make it difficult to analyze companies and make investments. A slick, user-friendly site is essential to carrying out the research necessary for making smart decisions. You don’t want something as seemingly minor as a misleading format to derail your ambitions as an investor.
Before signing up for a particular platform, take some time to experiment with the website. Click through the pages and decide whether you’d be able to navigate the site easily when money is on the line. You can also search the internet for reviews, looking for opinions on a platform’s user experience. Once you’ve gotten a feel for a few different sites, you can decide which one seems like the best fit.
Popular Startup Investment Platforms
AngelList
AngelList is a platform for startup companies to raise capital from angel investors. Investors can find and make offers on startups, and then the company decides if the investor provides a good fit for the company in return for an equity stake in the company.
AngelList is a platform that’s similar to other equity crowdfunding sites like Kickstarter or Indiegogo, but instead of funding projects with donations or pre-purchasing items, investors are trading securities in startups. AngelList also has its own form of investment that helps provide companies with early stage funding.
The advantage of this crowdfunding site is that it advertises itself as being more selective than Kickstarter and Indiegogo, which means that it only lists higher quality companies.
SeedInvest
SeedInvest is a crowdfunding platform where entrepreneurs raise money from investors in exchange for equity in their company. The site was founded in 2013 and has already funded over $1 billion worth of startups since then.
Their platform allows investors to browse through different investment opportunities from around the world. It has a user friendly interface and allows users to filter by sector, country, stage of development, type of business, and more.
SeedInvest offers two ways to invest in startups. The first is through its Seed Fund, which invests in early stage companies (seed funding). The second is through its Venture Fund, which invests in later stage companies (series A funding). Both funds offer different levels of risk, so it’s important to understand what each fund does before deciding which one is right for you.
Making Your First Investment
After signing up for a startup investment platform, your next step will be to make your first investment. At this stage, patience is vital. Rushing at the first opportunity you encounter can lead to disastrous outcomes.
While any startup investment is risky, you can increase your chances of success by doing proper research. Take some time to learn about the different types of startup investing available. Then, investigate some of the companies on the platform until you find one that seems promising. While startup investing isn’t an exact science, it always pays to be diligent.
Importance of diversifying your startup investments
Whatever you do, don’t invest your entire budget in a single company. Even the most promising startups are always liable to fail. Diversification is an essential tactic in every type of investing, and startup investing is no exception.
Investing in different companies is important, but you should go even farther by investing in companies that belong to different industries. That way, a sudden downturn in a particular sector of the economy won’t sink your entire portfolio.
Finding the Best Startup Investment Platforms
Startup investing is a great way to make money quickly. It’s certainly risky, but the increased risk brings greater potential rewards. By choosing the startup investment platform that’s right for your circumstances, you can set yourself for a successful run as a startup investor.