Most pundits christen it as the ultimate gamble. It is also the fodder for the future. The returns can be ridiculously sweet if you hit it big. I’m talking about technology. Most of the top 10 biggest tech giants are barely 20 years-old. Within that time, they have turned modest investments into billion-dollar conglomerates.

Each of these tech giants will tell you of a very charming story of how they bet on the idea of the future. What most of them will never tell you is the number of similar startups that have since exited the market since they started. Before you activate that gallant mode, here is what you need to consider.

 

Understand the risks

Even experienced venture capitalists don’t have a perfect record. Most of them will be comfortable with anything above 50 percent. It means, for every $100 they invest in startups, $50 would land in a furnace.

Another statistic worth mentioning is that at least nine out of 10 startups close shop within the first five years. Half of those firms go down due to poor business strategy. Technology catches others napping and whitewashes them.

The risks are grievous. Unlike established companies that can shed some of their value then recover, once a startup closes shop, that is the end of the music. It doesn’t matter how much you have invested.

 

Know the law

When it comes to investing in startups, only wealthy people were able to invest. However, since the passing of the JOBS Act, almost anyone can invest. However, you must qualify to do so. The qualification is simple, an annual income of at least $107,000 or a marching bank balance.

At that level, you will qualify to invest $2,200 or 5 percent of your annual salary. As you work your way up the income ladder, you can invest more. To invest, you can invest in companies that SEC and FINRA clear for debt or crowdfunding.

However, an SEC or FINRA clearance is not a guarantee that the startup will succeed. Their role is to ensure that the companies are in legitimate business. You have to do your due diligence before you invest.

 

Get in your industry with your money

It is not mandatory to invest in tech firms targeting your area of expertise. However, experts recommend that you do. Part of suave investment is to interrogate company finances, products, and methods.

If you are a doctor, can you competently interrogate a financial technology product? Maybe not! If an analytics startup tells you they have the most exciting data catalog in the market, you probably should do some research to assure they are telling the truth. But where would you do that research? My point is this: Invest in an area that you have pertinent information and knowledge. It may be a hobby or your spouse who has some connections there. However, it should be something that interests you.

 

Start at the bottom

Be realistic about your chances. Most startups take at least seven years for them to pay out their angel investors. Popular checkouts are IPOs or buy-offs. Startup investments are therefore long-term investments because it takes quite some time to get a payday.

Getting reach quickly is a possibility, but the chances of it happening in the first three years are minimal. Therefore, you will need to spread your risk by investing in several startups.

The best place to start is through crowdfunding initiatives so that you can get the hang of it. You can choose from existing platforms . Some will allow you to invest more money than others do. Some will even offer you guaranteed returns on investments.

As you grow in stature and experience, you can move on to elite levels. Who knows, one day you might become a venture capitalist.

 

Conclusion

Startups investment is for the bold. You have to hope for the best but expect the worst. Invest what you are ready to lose.

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In order to run a small business well, one needs to make sure that he or she has the talent base necessary to make this a reality. It is not necessarily as easy as you might think to find the right people out there who can get the job done correctly the first time. It takes patience and time to find the right individuals and you might even have to use outplacement services, but you can do it. We will give you five tips on how to find and keep that talent today.

 

1) You Don’t Have To Just Hire Those With Degrees In Finance

Yes, it does seem ideal to hire people who have a degree in finance, but they are not the only ones with something to bring to the table. It turns out that those who have pursued other types of education often have crossover talents that work great in the world of finance. It is also a fact that those with their finance degrees are going to exist in a pool that is already overfished. Every company starts there, so why not take an alternate route and try something different?

 

2) Find Natural Leaders

Those with good communication skills are often the kind of people that you will want to promote into leadership roles. This does not mean that you have to exclude people who might be introverted, but it does mean that you have to have a keen awareness of who among your group really does possess the talent necessary to lead a team of people within your business structure.

 

3) Look For People Who Take Pride In Their Work

You will actually want to try to find people who take pride in the work that they do for you and also strive every day to make your business stronger. This is because they have fully invested themselves in the mission that you are pushing forward as well. There are not necessarily a lot of these type of people out in the world. So many are interested only in going after whatever will make them personally wealthier and more enriched, but there are some who still get it. They understand that when they work on building up the business that they are working for that it ends up benefiting them in the long run as well. You have to find those individuals.

 

4) Keep The Current Team Happy And Word Will Spread

As long as you can keep the morale up around the office as it stands right now, word should start to spread to those with the talent that you are looking for that you provide a great place to work. Think about workplaces like Facebook and Google. No one has to tell you that these are great places to work, you have already heard about it on the news or elsewhere. You already know it and so does the rest of the world. This is all because of word of mouth advertising of those companies as places to work. When you start to think about it like this, it is pretty clear that you need to do what you can to keep your current people happy by making the office fun.

 

5) Hire From The Competition

There is nothing wrong with trying to snag away some of the best talent from your competition so long as you are doing so in an ethical way. This is just a way to build up your business and remain competitive in the always competitive business environment. It is a war out there, and you need the best men and women available to help you fight those battles. Consider hiring some of those talented individuals from the competition as a shortcut to finding the right crew for what you are attempting to do. You will not regret it when those new employees begin to produce some serious results for you right off the bat.

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