Why Should You Consider Investing In Startups?
As an investor, there are many possible ventures that you could invest your money into. Investing in startups could be a great way, to see your money multiply. So what do you need to know to invest?
Why Should You Consider Investing In Startups? What You Need To Know!
If you’re looking to invest in a startup business, you need to understand what kind of crowdfunding the business is carrying out. As an investor, you may be looking to invest to increase your money and make a return on your investment.
Investing in startups can be regarded as a skill, and it is best to invest in a startup that you feel fills an unfilled niche. You may also be looking to invest in a startup just out of the kindness of your heart, to see the business grow or maybe it may be a business that you just believe in. This is known as donation funding and is where your investment is a donation so you don’t get anything in return, just the knowledge that you invested in the startup business.
Why Should You Consider Investing In Startups? Multiple your money!
When investing in a startup you need to check for the different crowdfunding, whether its equity funding; where you can make a return on your investment, and when the business is made public or sold.
After you have found a startup that you may have interest in, or that you may believe in its potential success, it is advisable that you invest early (even though it may be risky) because when the business is successful, it pays off.
For example, Seedrs provided us with information that their investors have generated an annual rate of return of 14.44% between 2012 and 2016.
As an investor, you can benefit from tax reliefs from your investments in startups, which is great because it helps with reducing the risk with unlisted public companies.
How? Well, startup businesses that are looking for equity crowdfunding may be able to qualify for Seed Enterprise Investment Schemes (SEIS) or Enterprise Investment Schemes (EIS). The EIS can benefit you more than just with reducing the risk with unlisted companies, you can reduce your income tax by about 30%. The SEIS can reduce your tax by about 50% which is good cause if you are to lose your money if the companies fails because you would make some of the money back.
Why Should You Consider Investing In Startups? Donating for the fun of it.
Donation crowdfunding has no tangible benefits for you as an investor. The startup business could be that of a friend or a family, so investing in the business would help that friend or family achieve their dream.
You’re able to invest in a business you believe in before they become successful, that gives you, the investor, satisfaction of knowing you invested in the startup to help its growth. Apart from this, your investment could provide you with excitement because you can breed more life into a city, as this funding for the startup could lead to more jobs and opportunities in that area.
Why Should You Consider Investing In Startups? The Conclusion
To conclude, when you consider investing in startups you need to think about the reason in why you are investing in a startup company. When investing in startups, you could be taking a risk but there are potential big rewards. You need to make calculated decisions if you are investing to multiply your funds, investing in niche companies that provide some use to people is often a good choice. You can receive major benefits other than making potential profits for example tax breaks. Always make sure to invest in startups that you believe in.
Do you need crowdfunding support?
We can help. Drop The Crowdfunding Studio are proud partners of Crowdcube and Indiegogo. We assist ambitious businesses in communicating their ideas, products and services with outstanding crowdfunding video production, campaign design, crowdfunding marketing and crowdfunding PR.
To learn more about us and our services, visit our website: drop.studio
Or book a free phone workshop today and ask us anything, like how to create a successful crowdfunding campaign or how to accelerate your business from zero to fully funded.