Invest The Way Venture Capital Firms Do And Generate A Large ROI
Venture Capital firms tend to be extremely good when it comes to generating large returns on their initial investments. Not only do each individual that operates within the firm put their money in, and thus mitigates the risk of losing a lot of money that you would otherwise lose individually, but each person within the group can choose who to invest towards, or what company to invest in.
This works very well, because it allows the group to invest in businesses that are extremely risky, such as new businesses that might have untested technology or a concept that is untested, and reap the rewards together. Because of this, Venture Capital Firms have much more control over which companies they invest and they also get a bigger ownership percentage for their investment, making them highly more profitable than other organizations, such as banks or credit unions.
The beauty? Venture Capital Firms reap all of these benefits because otherwise the business itself wouldn’t receive the financing needed if it didn’t go through with them in the first place.
What does this mean for you then, especially if you’re not an Investor who works through a Venture Capital Firm? How can you invest in the same way and reap the same benefits?
Well, there’s actually several ways that you can achieve this. The first way is obvious: Get a group of Investors who you know and trust, and just start a firm of your own. You really don’t need anything other than to form a company, put the money into the company, and invest that money out as a group and split it according to what everyone puts in.
Of course, that’s a slow way to do it, and it might not even work out because then you’d have to put your trust in other people. If you wanted to do it alone, the best way that you can do it is through crowdfunding.
Crowdfunding is pretty much the same as Venture Capital investing. You find someone, or a company that needs money and you and other people donate to that person or company and split the profits among all who donated based on what they put in. Typically, crowd funding (or Peer to Peer lending as it’s called) have a higher interest rate because you’re not going through a bank, and it’s typically based off that person/companies credit rating. So it’s possible that you can lend to a person, who has great credit, and see a small return, or lend money out to an individual with poor credit and see a higher rate of return on your initial investment.
That’s enough about what a Capital Venture Firm is though, and how there are similar ways investors can work like one. When it comes down to it, there are really a few things that Investors look for when it comes to how they choose to invest their moneys in a business.
1) Is the Business Model Scalable?
2) Is the Product innovative, or different enough to be noticed?
3) Is the market large enough to sustain profitability.
4) What are the projections on returns?
All of these and more are questions that are typically asked by all Venture Capital Firms, and all Investors who think like one. Shark Tank is a television show that shows this mindset, but there’s a lot more that goes into the decision.
Luckily, Financial Technologies have come a long way to help alleviate and mitigate a lot of the risk that comes with Venture investing in the last few decades, so these decisions don’t have to be thought over and paralyze a lot of investor’s choices. One company called Konzortia Capital is a company that seemingly understands the mindset of Venture Capital investing, and knows how it can work with their Koura platform.
Think of Koura as a New Asset Class (of which it is). You invest your money straight on into, and it acts as a security asset that you can then use to pay out towards companies that are in need of building quick capital. That Koura then will have its value change depending on the market, and you can see quickly how your investments grow.
Don’t like what you’re investing into, and need to pull it back? Luckily, Koura also has the ability to act as a liquid asset too that can be quickly liquidated down if you need funds immediately or just want to pull your funding back. No doubt this will become the industry standard in the 21st century for Venture Capitalist investing, and if you want to find out more about how Konzortia Capital, and their Koura, work, be sure to check out the link below.