Capital Formation: Helping Firms Grow with Startup Investing

Granting startups seed funding for enterprise survival and growth entails risk, but it can be rewarding. Startup investing means being involved in a company that could contribute to movement in the economy. Startup investing also offers employment opportunities.

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The company’s business plan is rigorously studied before it becomes beneficiary of the belief and financial support of investors. When the startup eventually thrives and prospers, the initial investment could be multiplied five or a thousand times over in terms of returns. Thus, startup investing potentially strengthens the investment portfolio and generates oversized investment returns for retirement and other purposes.

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According to the JOBS Act, startup investing need not be limited to extremely wealthy investors. All accredited investors qualify, and there are various channels for doing so: venture investing platforms, joining pitch events, investing through IRA or 401k, or through personal connections with trusted entrepreneurs. Investment can also be made in person or through an online platform.

One of the key selling points startup investors look for is the growth that a business model can attain over time. Investors should immediately see the founding team’s comprehensive vision towards profitability. Investors also analyze if the company has a competitive advantage over others already in the market.

There are multiple criteria for determining the viability of a startup, and its worth in investments. Investors should learn to anticipate risk and not invest more than what they are willing to lose. It can take years to master the mechanics of startup investing but a winning investment rewards exponentially.

Dr. Sassan Kimiavi of Bethesda of Maryland is a Principal Investor at Blu Venture Investors, LLC, a venture capital investment firm that focuses on technology companies. Along with other principal investors, he invests in startups and early stage firms. Follow this Twitter account to read more about his work.

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