To Invest or Not to Invest: Identifying Startups with Potential

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What Type of Investor Are You?

With most decisions in life, you first need to know yourself before you can make a choice. Similarly, before you decide to invest in a startup venture, you need to determine what type of investor you are (or want to be).

Are you an angel investor?

If you have a high net worth and are looking to provide small newly-forming ventures with the financial investment they need to get started, you are an angel investor. As an angel investor, your goal is to help the company get off the ground, to provide the capital needed to be able to innovate and grow. You are less focused on the growth and profit in the short term. Angel investors usually put forth between $25,000 – $100,000 per investment.

Are you a venture capitalist (VC)?

If your preference is to receive equity in a startup with high growth potential in exchange for a financial investment, then you are a venture capitalist. VC’s usually come in after the initial founding of a startup and when the company is on the brink of a growth spurt such as when they are about to bring a product to a new market. VC’s work closely with the company and tend to invest larger amounts, $1 millon and more. 

 

Both angel investors and venture capitalists are eligible to invest with InvestiNation. Click here for details…

What’s Your Niche?

“Niching down” is a buzzword in the entrepreneurial world and refers to a company honing in on the most narrow definition of their target market. The idea behind it is that a company cannot be everything to everyone and rather must identify a very specific niche of people to market to in order to maximize their chance for success.  As an investor, you too should choose a particular niche in which you want to focus your investments.

 

If you’ve already decided that you want to invest in the Israeli startup scene (good move!), your job is not yet complete as there are many options when it comes to choosing a specific area of focus. It could be medtech, or agritech, maybe fintech or construtech. The possibilities are pretty endless, but the most important thing is to choose an area that you either already know a lot about or are passionate about learning. And then be prepared to immerse yourself in the topic as the more educated you are, the better you’ll be able to judge whether a particular venture is the right investment for you. 

 

When considering a niche, you can go wide and decide to focus on all companies that are working in medtech, for example. Or you can narrow it down further and say you are interested in medtech companies working specifically on diabetes or any other of a myriad of diseases. Alternatively, you may choose to look across industries and focus on a certain type of technology or service. 

 

Whatever you choose, this is your opportunity to put your own values into action and provide capital for companies who are doing work you believe in. If you aren’t sure where to begin, think about a topic that most interests you and start researching startup companies in that field. 

A good place to start is by browsing InvestiNation’s current offerings. 

How to Analyze a Pitch?

Lucky for you, you’ve found InvestiNation where we have done the hard work for you and have already done the due diligence on the companies whose investment opportunities we are promoting. All you really need to do is read our analyses and decide which opportunity is best for you.

 

But, in case you are interested in some behind the scenes information, we will share a few highlights and best practices when it comes to learning about a new venture in order to make an investment decision. 

The Industry

First, get a handle on the industry as a whole. Understand the landscape – who are the competitors, the major players in the field. Read up on the challenges and opportunities that currently exist in the marketplace. This will give you a macro-level view that will help you understand the position of the company you are considering investing in within its field and its chances for success.

The Team

It’s very rare to actually invest in a “company.” In reality, you are investing in the people who run the company. Look into their experience and history. Connect with them on LinkedIn, read articles they have published or news items about them. If the company leadership is hosting a webinar or other informational session, go and ask questions so that you can get comfortable with the team and they can earn your trust.

 

The Numbers

Here’s where some people’s minds glaze over, but it is important to look at the quantitative reality of a company when making an investment decision. Again, we’ve done all of this work for you, so you don’t need to focus on it too much, but if you are so inclined then the key documents to look at are a company’s annual report, 10-K filing, and cash flow statements. These documents will give you a clear picture and understanding of the company’s performance, stability, and potential for growth. 

The Pitch

In addition to the research you can do into a company, you also must consider the pitch and the way they present themselves. At InvestiNation, we provide you with a clear breakdown of the company’s pitch including all of the main elements that you should be aware of. These elements include:

  • Realistic expectations of the company’s activities and growth potential
  • Clear explanation of an existing problem and the solution that the company provides
  • A go-to-market plan
  • Financial projections

Putting it All Together

Once you know what type of investor you are and the niche you want to invest in, you really can just leave the rest to us! All you have to do is browse the pre-vetted opportunities and see which one speaks to you the most. Click here to see exactly how to invest with InvestiNation. 

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Why invest with InvestiNation?

Everyone is in search of “the next big thing,” that new company that is going to go far. But few actually have the time or ability to go out and find them. We’ve done all that hard work for you and present you with a selection of the most promising, pre-vetted companies from exciting up-and-coming technology fields.

Cover Your Bases! Diversify your Investments

Investing in startups is exciting- if you make the right choice, the potential reward is massive, but those who back the wrong venture (which is approximately 90% of VC investments) can face large losses.