Invest In Best Startups And Make Money
A startup company or startup or start-up is an entrepreneurial venture or a new business in the form of a company, a partnership or temporary organization designed to search for a repeatable and scalablebusiness model. These companies, generally newly created, are innovative in a process of development, validation and research for target markets.
Startup investing is the action of making an investment in an early-stage company (the startup company). Beyond founders’ own contributions, some startups raise additional investment at some or several stages of their growth. Not all startups trying to raise investments are successful in their fundraising. The solicitation of funds became easier for startups as result of the JOBS Act. Prior to the advent of equity crowdfunding, a form of online investing that has been legalized in several nations, startups did not advertise themselves to the general public as investment opportunities until and unless they first obtained approval from regulators for an initial public offering (IPO) that typically involved a listing of the startup’s securities on a stock exchange. Today, there are many alternative forms of IPO commonly employed by startups and startup promoters that do not include an exchange listing, so they may avoid certain regulatory compliance obligations, including mandatory periodic disclosures of financial information and factual discussion of business conditions by management that investors and potential investors routinely receive from registered public companies
Investing in startups is trending, but the million dollar question is how to generate outsized returns?
How do you actually make real money?
If you had invested just $15,000 in Amazon, Dell, Apple, or Microsoft, when they went IPO, you’d be a million dollars richer just from that investment according to the IPO Playbook. Apple kicked that 100x ‘Franklin Multiple’ to the curb with a 4,581.7% rise instock value between 2002 and 2012 alone.
For some of you reading this, $1million may just be chump change. But imagine if you had invested long before the IPO? How would that make you feel right now? What would that do for you?
Even Mark Zuckerberg’s net worth has been trumped by Uber founder Travis Kalanick, at $6B as of 2015. But as a startup investor you don’t have to be the founder, and do all the work to experience viral investment returns.
As a disclaimer, while there are best practices to follow when venture investing, before making money, it is likely that you will lose a bunch. Investing in early-stage startups is truly an art and like leading Venture Capital firm First Round puts it, “there’s no such thing as a formula for success.” But instead of going at it on your own, it does help to leverage investing platforms like 1000 Angels (a company I co-founded) that offers highly curated, direct investment opportunities that are deeply vetted. It takes a lot of the heavy lifting out of venture investing.
However, for some, startup investing has proven to work mind-blowingly well, and many individuals are finding this an absolutely essential financial move for generating the returns and results they crave. So what are the specific advantages of investing in early stage startups? How can you invest in startups too? How do you actually make money doing it, while minimizing risk, and elevating reward potential? How do you pick awesome startup investments?
Four Reasons People Invest in Startups:
- Potentially generating uncorrelated outsized returns and provides portfolio diversification
- Looking super smart when you’re winning startup picks become hot trending topics
- The desire to generate enhanced investment returns for their investment portfolio for retirement and beyond
- Craving to be involved in driving positive change, bringing new solutions to life
The Smart Money Goes to Startup Investing
Investing in startups iswhat many intelligent, successful, wealthy individuals do when they have to put their own money to work. That should speak for itself.
When people need money for their business, they turn to wealthy investors as seen on ABC’s Shark Tank. Think Mark Cuban, Daymond John, and Barbara Corcoran. Then there are Silicon Valley legends like PayPal co-founder Peter Theil.
Thanks to the JOBS Act, investing in startups is no longer only the reserve of the uber-wealthy. It is now effectively open to allaccredited investors. Those that have thrown themselves into this wealth vehicle have been finding very exciting results. Even New York Times Bestselling author Tim Ferriss, says“so far my startup bets are 10x+ more successful than my publishing career.”
BEST STATUPS TO INVEST
Slack is an internal communication platform that is used by over 30,000 companies. Founded by Flickr co-founder Stewart Butterfield in 2013, the company has quickly reached a valuation of over $1 billion. Slack allows company employees to communicate in one place no matter if they are working from their office computers or tablets while on the road.
DigitalOcean is a cloud-based hosting company that was founded in 2011 by Ben and MoiseyUretsky. DigitalOcean has undergone an incredible amount of growth over the past four years, and in 2013, it was named the world’s fastest-growing cloud hosting service. To date, it has over 400,000 customers and has raised $90.2 million in funding.
Mixpanel helps companies understand how their customers behave while on their website or mobile app by providing A/B testing tools. The startup wants to give companies the ability to look deeper than just page views and, instead, see the entire path of the customer. It was founded in 2009 and has raised over $77 million in funding.
Acorns is hoping to make saving and investing as simple as possible. After connecting their debit and credit cards, the app gives users the ability round up all purchases to the nearest dollar. The extra amount is then added to a diversified investment portfolio. The company was founded in 2012 and has raised $9 million in funding.
Shyp, which was founded in 2013 by Jack Smith, Joshua Scott, and Kevin Gibbon, is attempting to take all the stress out of shipping packages. The company will pick up your items wherever you want, pack them for you, and then ship them for the cheapest price possible. Shyp is currently operational in New York, San Francisco, and Miami and will soon be launching in Los Angeles. To date, it has raised $12.1 million during two rounds of funding.
ClassDojo is a communication platform that helps connect teachers, students, and parents. This platform allows teachers to encourage students while engaging with the parents about their children’s progress in the classroom. ClassDojo is currently being used by over 35 million students, teachers, and parents worldwide. Founded in 2011 by Liam Don and Sam Chaudhary, ClassDojo has raised $10.1 million in private equity.
- Blue Apron
Founded in 2012 by Matt Salzberg, Blue Apron is trying to make cooking at home a little bit easier for busy families. Each month the company ships recipes and pre-portioned ingredients to their customers. This helps to not only save time, but also reduce food waste. Blue Apron currently delivers over one million meals each month. Since its launch, it has raised $58 million in funding.
Instacart, founded in 2012, gives customers the ability to order groceries either online or from their smartphones and then have them delivered within an hour. In December 2014, the company raised $220 million in funding and has now raised $274.8 million since its launch.
The company is poised to take advantage of the growing freelancer market by offering the same background checks offered by traditional firms, but quicker. Its background checks have become staples for companies like Uber, Handy, Instacart, and GrubHub. Its background checks include address history, sex-offender searches, and Social Security-number verification, in addition to checking applicants’ names against terrorist watch lists and crime databases.
Founded: 2014 by Jonathan Perichon and Daniel Yanisse
Funding: $39 million from Y Combinator, Accel Partners, Khosla Ventures, and Google Ventures among others.
Jet was founded in 2014 by Marc Lore, who also founded Quidsi.com, the parent company of Diapers.com. Some have touted this e-commerce company as being an Amazon killer even though it will not officially launch until spring 2015. The companies had a $140 million Series B round of funding that closed in February 2015, raising their total equity to $220 million.
The company evolved from an email newsletter to a site similar to Reddit, but for products. Users up-vote the new products, startups, apps, podcasts, and websites that are the most popular that day.Founded: 2013 by Ryan Hoover
Funding: $7 million from Andreessen Horowitz, Google Ventures, SV Angel, and Y Combinator, among others.
A list of the the best startup companies to watch in 2015 wouldn’t be complete without including Uber. The ridesharing startup has revolutionized the transportation industry. The company has reportedly been testing out additional functions, such as convenience store delivery and courier services. It just closed a new $1 billion round of funding, bringing its total to $5.9 billion since the its 2009 launch.