How to invest in startups?

Tecra Space
27.10.2020

In this article, the author focuses on the ways an individual can pursue in order to become a successful startup investor. Check it out!

Investing might seem as an activity available only to the wealthiest and experienced people. But ever since crowdfunding emerged, the opportunity of supporting projects with little money has shaken the status quo of the global economy. 

But how does it exactly work?

Startups are projects for companies that don’t have the big capital yet. This means that they need approval of potential supporters in order to flourish. This also means that in order to get that support, they aim to provide its backers with the top-notch quality of their product and solutions to problems society is not dealing with, as their services have to be more innovative and attractive than those presented by regular companies with big capital backing.

How am I benefitting from investing?

By investing in new companies, you help create new businesses and support new ideas that can influence the world. Your driving force has a big impact on the shape of any industry. You can engage in supporting local ideas that are compatible with your vision of the better tomorrow - and do it all online. By becoming a startup investor, you’re creating the new economy. Moreover, thanks to the possibilities of backing startups with little money, you can diversify your investments, thus decreasing the possibility of a loss. 

Of course, due diligence is necessary, as investing is always associated with risk, but it is a part of the game. But in the cases of successful projects, the return on investment can be lucrative. One of the biggest perks of investing in startups is reaping the early harvest. By backing a project at the beginning of a life cycle, it means that one can benefit by initially putting in a small investment. With the passage of time, the startup will be developing, which means the barrier of entry to profit shares ratio is adequately decreasing. As the market is restructuring, the money from your investment will go straight to the source of your choosing, and not to the pockets of the “Wall Street” representatives. This way, you will really support the innovators.

Okay, you guys convinced me. Where do I start?

The depths of the internet offer few websites that enable such investments, but we do believe that tecra.space has the best features facilitating this kind of operations. And why is that?  Owing to tokenization, we present a system that gives the backers a “proof” of their transaction, which is not always the case. Owing to the preliminary research that is conducted among our supportive community and the opinion of the experts, we can present only the projects that we think have a high commercialization potential. Moreover, in comparison to other platforms, we allow our clients to participate by making donations as small as a few dollars (depending on the value 1 TCR), whereas other similar investment platforms have a high-barrier entry, from the minimum input being as much as 100 dollars to even more!

How will I know if the project is worth investing in?

By researching the project, estimating the team’s human capital as well as the idea’s commercialization potential, as these two factors are believed to be the best indicators of whether the project will be successful. Moreover, start-ups with balanced “risk/reward” profiles are usually more trustworthy.

On tecra.space, we encourage our community and experts to evaluate a project and only after their positive opinion we can launch a fundraising campaign. This way, only highly vetted ideas are presented to our potential investors.  But if you still want to get a better sense of the fundraising platform’s market, you can check out this article and read more about it. 

There are many ways of privately investing in startups that do not include participating in venture capital schemes.  If you want to read more on this subject, click here - we present one of our first articles on different types of investors - here, you can find details about business angels. If you want to check it out by yourself, or aren’t completely convinced it’s a good option for you - check out tecra.space to see what interesting startups and projects you can invest in. Stay tuned!

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