Risky investments have a number of characteristic features. Some of them are strengths, while others are weaknesses.
The benefit for a budding startup is obvious: the necessary amount will be allocat for the project, which he himself simply does not have in 90% of cases. At the same time, he remains the author (the ideological inspirer) and receives most of the profit, often without investing a penny! For an investor, the benefit is that by investing in a venture project, he gets a share in a very promising business. Please note that having financ a business 100%, you can rarely get more than 50% of the company! In startups, an idea is valu higher than the funds for its implementation. Nevertheless, it is still profitable! 2.
Funding begins at the project development stage
Often investments are ne already at europe cell phone number list the stage of “polishing” the idea. When you only have plann calculations of future financial indicators. This is, perhaps, one of the weak points. Plann profitability indicators are an extremely unreliable indicator. It is impossible to bring it closer to reality due to the fact that the business is just starting. There is no reporting and data It’s beneficial for past periods, on the basis of which one could make an accurate forecast for the future. Be very careful when choosing an object for investment, because there are a lot of scammers among startups who will provide a colorful and very convincing business plan, and then disappear in an unknown direction with your money!
All financial risks fall solely on the investor
If the business fails, then the what is android? money will be lost only by the one who invest it. The startupper is not oblig to compensate anything, since the It’s beneficial degree of risk was known in advance. The investor provid funds for the implementation of the idea voluntarily, without any guarantees. Of course, it happens that money is provid in the form of a loa aero leads on a repayable basis, but this is very rare.