We thought it would be appropriate to once again discuss the benefits of venture investing and highlight why right now is the perfect time to dive into this area full of intricacies, challenges, discoveries, profits, and returns.
Let's refresh the definitionsVenture capital investments are long-term 5-7 year investments of private capital in promising companies. And they are often investments in early-stage startups.
The current state of the venture industry by the end of 2022
On the one hand, in 2022 the venture capital market sagged. The volume of investment in startups has decreased, and many projects are dying.
On the other hand, look at the forecast for the next 5-10 years.
The current drawdown is an ideal entry point for an investor who is interested in multiplying capital by playing the long term.
5 good reasons to invest in venture capital in 2023
- Potential for high returns: Investing in startups at an early stage can potentially lead to high returns if the company is successful. Many successful startups experience rapid growth, which can lead to significant appreciation in the value of the company and the value of the investor's stake.
- Diversification: Adding startup investments to a diversified portfolio can help spread risk and potentially increase overall returns.
- Opportunity to be involved in the growth and development of a company: By investing in a startup at an early stage, you can have the opportunity to be closely involved in the growth and development of the company. This can be a rewarding experience and can also provide valuable insights and learning opportunities.
- Potential to influence the direction of the company: As an early stage investor, you may have the opportunity to provide input and guidance to the company's management team, which can help shape the direction of the company.
- Potential to gain access to new technologies and innovations: Startups are often at the forefront of new technologies and innovations, and investing in a startup at an early stage can provide the opportunity to gain access to these technologies and innovations before they become widely available.
All of these reasons only become more relevant when you consider the obvious: a new Bullrun is coming. It will be even bigger and more impressive than the previous ones - more wallets, more users, and more liquidity.
The GWI research company conducted a large survey of audiences from 16 to 64 years old.
- The average % adoption of cryptocurrency globally is 12% at the end of Q2.
- The higher the inflation of native fiat currency, the higher the % of cryptocurrency holders in the country. For example, Turkey tops the chart, where annual inflation reached a new peak of 83% in September. Interest in cryptocurrency will only grow further.
After all, it makes sense to invest now.
Venture capital investment is about the long term. The whole point is to buy cheaper at an early stage and sell for more in 3-5 years. For example, the optimistic forecast from the Yalla!Market pitch deck is x70 after the IPO.
If you are guided by this principle, right now, at an early stage and a fallen market, you need to enterverified projects with good traction, clear business model, strong team, and a clear roadmap.
So you can rub your hands together in the new Bullrun, and make profit when the breakdowns come.
You're not going to wait until it's too late to get into Yalla!Market, Revelator, Zenpulsar, and other projects, are you?
OK Afford.Capital, how to score startups to invest in?
There are a variety of factors that investors may consider when evaluating startups to invest in. Here are a few key factors to consider:
- The management team: The management team is critical to the success of any startup. Look for a team with a track record of success, strong leadership skills, and the ability to execute their vision.
- Market opportunity: Evaluate the size and potential of the market in which the startup is operating. Is there a clear demand for the product or service that the startup is offering?
- Competitive landscape: Consider the competition that the startup will face. Is the startup well positioned to compete in the market, or are there other established players that could make it difficult for the startup to gain a foothold?
- Product or service: Evaluate the quality and uniqueness of the startup's product or service. Does it solve a real problem or meet a real need in the market? Is it innovative and differentiated from competitors?
- Financial projections: Look at the startup's financial projections, including its projected revenue and profitability. Are the projections realistic and based on solid assumptions?
- Use of funds: Consider how the startup plans to use the funding it is seeking. Is the company's capital allocation strategy sound and aligned with its growth plans?
It's important to note that these are just a few of the many factors that investors may consider when evaluating startups to invest in. It's also important to do thorough due diligence and consider seeking the advice of financial and legal professionals before making any investment decisions.
But the best recommendation is still the advice to trust the professionals. For example, invest with Afford.Capital.
Our scoring system has 220+ parameters, we review 5,000 startups a year and select for investors the top 1% of the most promising ones, paying special attention to security.
Get a free consultation on investing in venture capital from a fund expert. Connect us directly on Telegram.