Investing into startups can offer a lot of benefits for you. The biggest upside is their growth potential as startups have a lot of room for expansion and multiplying your investment returns. They also provide you with a great opportunity to diversify your portfolio and spread your investments across different industries and varying business stages to reduce the risks within your portfolio. Another benefit lies in the excitement that comes with the startup world. Being part of something new and innovative, believing in new ideas pursued by entrepreneurs and seeing these ideas being put into reality can be very fulfilling – also for you as an investor. An additional opportunity that comes with startups – one that is especially important for us here at baMa – is the ability to leave a positive social and environmental impact through our investments and support businesses that pursue doing something good for society, while still generating financial returns.
To take advantage of these benefits and become a skilled investor it is crucial to be able to build a good understanding of a startup and know their ideas, their motivation, and the potential of their market. Today, we want to highlight some of the many valuable skills that can help you answer these questions and invest into startups successfully.
One of the key requirements for success is to be passionate about startups and to have a genuine interest and understanding of the ecosystem. It is important to be aware of the newest trends, developments, and their impacts in the startup field and to be able to hold conversations about these topics. A passion for the startup world will facilitate your ability and drive to network efficiently, which is a key aspect for succeeding. For that it is crucial to have interpersonal skills, great self-awareness, and the skillset to build relationships with founders and other figures in the field.
Other important skillsets to develop are your analytical and financial skills, in order to form good judgement on investment opportunities you will come across. It is important to be able to build solid opinions on these opportunities and the trends in the field as well as growing an expertise in carrying out the investment processes. Excellent analytical and financial abilities, combined with your passion and understanding of the field, allow you to assess more successfully whether a startup has the potential to be a great investment for you.
To dive further into the world of startup investing and the skills needed, we encourage you to look into the following books and podcasts, that give you more insights and tips on investing into startups successfully:
- Angel: How to Invest in Technology Startups by Jason Calacanis
- Angel Investing by David S. Rose
- Startup Wealth: How the Best Angel Investors Make Money in Startups by Josh Maher
- Angel Insights Podcast
- The Twenty Minute VC Podcast
Another crucial way to develop your investment skills is through guided training, which is something we at baMa are providing through our Diversity Investor Academy! If you value diversity and inclusion, are interested in successfully investing into startups and becoming a business angel, we highly recommend checking out the courses offered at the academy!
What do you think about these skillsets for investing into startups? What other abilities do you think are important in this field? What has proven valuable in your experience?