Investing in start-ups is exciting, but also risky. On the one hand, emerging companies have great potential for growth and are investment assets that offer great return. On the other, the success of these companies involves a lot of risk, which must be managed properly. What can you do to limit the risk? Why should you roll the dice on one of them? What does an accelerator contribute and how does it help with screening? If you’re thinking of investing in start-ups, these 5 tips will help you minimise the uncertainty.
1.- Diversify and invest in more than one company
We recommend having a balanced portfolio of start-ups, with options that allow you to compensate for losses until you find one with excellent return. This way, profits from the most promising start-ups will help you compensate for the losses of the less visionary ones. We recommend, in addition to diversifying, that you participate in different stages of the company: from the very early stages to the more advanced.
2.- Set aside part of your capital
Due to the risk involved in investing in start-ups, we recommend only putting in as much as you can stand to lose. We also recommend having a substantial enough budget to be able to participate in later capital increases and planning your investment in the middle term, not just the first year. Meaning, it is wiser to invest over five or six years, at least. This time will give you experience in the sector and you will learn to limit your risk.
3.- Invest in start-ups with a successful team
There are many factors that contribute to a project’s success, but did you know that one of the most important isn’t directly related to the product or service it is offering? Look for motivated, happy, dedicated founders who believe they are closer to success every day! If they are firmly committed to their idea, you are also at less risk of failure.
4.- Gain access to top-notch opportunities
Access to top-notch opportunities, also called dealflow, is essential. However, it can be complicated to break into these circles. Fluidra Accelera offers a selection of start-ups that are backed by Fluidra, the leading company in the pool and wellness sector. This company helps reduce the preliminary cost of searching for profitable options and gives you access to trustworthy companies that have what it takes to become successful businesses.
5.- Accelerator involvement
Finally, we recommend you look at how involved the accelerator is in the project, as it can help you assess the level of uncertainty. Fluidra Accelera accompanies entrepreneurs and guides them throughout the process. Together, they are not only capable of driving acceleration, but also boosting the value of the company.
Would you like to invest in start-ups? Contact us and gain access to our portfolio of projects!