Home Forums The Entrepreneur’s Corner Invest big bucks in few deals, or diversify as much as possible????

  • #68803

    JCO
    Participant

    Hello all,

    I know there is not a unique way to be successful by investing in Startups.

    Some will invest big amounts with strong commitment in few deals, while others will take the minimum and try to diversify as much as possible. Greater risks (concentration) could represent greater returns, while Managing Risk (diversification) could represent less but more stable returns.

    I WOULD LIKE TO READ YOUR THOUGHTS ON THIS……..

    In my humble opinion, I believe a good strategy would be to create a Portfolio with 30 startups. So, the amount of money you are willing to risk, divide it by 30 and that should be the investment per startup. Individual Startup picking will define your results. Choose without rush and only invest in those deals you feel comfortable.

    Hope to get some feedback…..

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    Replies

      • Mike
        Blocked
        #79011

        I’m new at this but I try to diversify my investments as much as possible. While at the same time trying to follow Neil’s advice by looking at the number of founders who also invested their own money if possible…, How high the demand for the product or service at hand may be. Does it solve problems?, Improve lives , save lives or would be of invaluable service in national disasters or domestic emergencies , (hurricanes, floods, tornados, accidents etc…) ..The huge TAM plays a major role in my decisions as well. Planning to get into the realestate investments in the near future… not sure of how the return works yet but he did mention the realestate investments could possibly bring a return quicker if I understood correctly…

      • #76631

        Thank you RomeoDelta……what you shared was greatly appreciated! Every little tid-bit of info we can learn on here will help us all in one way or another 🙂 🙂 🙂


      • Scott D.
        Participant
        #71115

        I agree with you that diversification is the way to go. A lot of these start-up aren’t going to make it, and its difficult to know which will be winners and which will be losers. As the old saying goes ” Don’t put all your eggs in one basket.”


      • RomeoDelta
        Participant
        #70720

        This is what my formula to success will be. YES, 100% definitely diversify but only in ones that have a huge market expansion and can work globally. So I can spend $3400 per yr angel investing in crowdfunding rounds as of this yr. So here goes…
        I will invest in at least 10-20-25 companies per yr starting now (my Max allowed amount) if average time it takes before seeing any return is 4 or 5 yrs then I will continue investing my Max every year (hopefully it goes up as my net worth increases which it will because I have other solid investments).
        Now, Fast forward 4yrs from now, I should start seeing some returns maybe sooner maybe later, right?
        Now if I maintain my process every year, my odds of having a really great return increases drastically all while starting to earn some kind of return weather 2x, 10x or the possibility of a unicorn even though that’s not my main goal (I already know this will happen by using this method eventually). I want positive returns to start coming in year after year, make sense?
        It’s not a race and I am well aware that these investments and the money is not going to start earning anything, anytime soon which is why this will work but will take time, right? I see a lot of people on here wanting that $50 or $100 investment to make them wealthy and that’s not going to happen. Just like Neil said putting all of your allowed amount into 2 companies is incredibly risky and most likely will not a successful strategy. Diversify, use Neil’s method, be patient and stay consistent and I bet it works.
        My plan is to do this consistently and keep growing, if I do this, then 4, 5, 10, 20yrs down the road the money should essentially keep rolling in. It’s a ladder effect.
        It all makes sense to me and Everytime I watch Neil I learn more and more. I am not new to investing by any means nor do I have a ton of $$ but I have done really good by spreading money out and pulling in different revenue streams. This will be exciting 😁

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