20 February 2017
INVESTIMENTI IN STARTUP
As the number of startups on equity crowdfunding platforms grows, investors' doubt may focus on this question: which one to choose among several startups?
- moneyPOP® (@MoneyPopIT) January 31, 2017
This tweet highlights the crux of investing in innovative startups, which lies not so much in choosing the best startup, but in diversifying the same.
In fact, in an industry like investing in unlisted assets, which therefore carries a very high risk factor, it is crucial to diversify investments, as already highlighted by key players in the US startup world including Dave McClure of 500 Startups, one of the most important early-stage startup VCs:
"Portfolio diversification is a form of due diligence."
This statement is all the more true the more the investment is in early-stage startups: the more growth is in its infancy, the more useful it is to diversify risk. Building your portfolio means to articulate the investments based, for example, on the growth stage of the company, the sectors of reference (to date there are 3 in which you can invest on Mamacrowd: virtual reality, international sourcing and manufacturing).
How much to invest, in how many startups. According to a SharesPost white paper, in fact, if you allocate 5% of your investments in fast-growing companies, you can increase the returns of a traditional portfolio by up to 12%. According to WeFunder, by investing in one or two startups an investor has an 83% chance of breaking even. By increasing the number of investments to twenty, an investor has a 67% chance of a return greater than 3x, and a 99% chance of break even.
Selecting a Startup. Choosing startups to invest in could then become a full-time job. A good starting point, especially for those who have only been working in this field for a short time, is to think about startups pre-selected by other operators.
For this reason Mamacrowd collaborates, constantly strengthening it, with a network of business accelerators and incubators, which by their very nature operate a selection of the best entrepreneurial projects in the Italian market.
The startups that launch an equity crowdfunding offer on our portal meet two important requirements: they have already followed a growth-acceleration path or they have already received the validation of their product/service from the market.
One more way to continue on the path indicated by Fred Wilson, of Union Square Ventures:
"Investing in startups is risky. If you make just one investment, you are likely going to lose everything. If you make two, you are still likely to lose money. If you make five, you might get all your money back across all five investments. If you make ten, you might start making money on the aggregate set of investments”.
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