If you’re new to investing, there are three main options to consider, suggests Aaron Easaw, writing in Fortune.
Are you in a position to invest in a startup business? Have you come across a new company that complements your own and needs a cash injection? Maybe your company has reasonably large amounts that can be tied up long-term?
Easaw’s simple breakdown of the three key types of startup investment should point you in the right direction for further investigation.
1) Be an angel
Angel investing refers to an individual or small group of people who use their personal funds to support a startup company. It’s the most common place for new investors to begin and it is actually the riskiest. Do your research and make sure you’re well versed in the business area you are investing in to be successful.
2) Get together
If you co-invest by joining an established fee-based investment network or fund, it removes a lot of the hassle of research and negotiation. It is medium risk for slightly larger investors.
3) Trust an expert
Fund investing is the obvious choice for new investors who want the lowest risk. As one of the fund’s Limited Partners, you provide the cheque and the general partners make the investment decisions. You will need to be accredited, but no longer need multi-millions to invest thanks to a new category of micro-funds that is fast emerging.
Pick the option that’s right for you, do your homework and it could be time to take that risk.