New Investment Opportunity!
There are generally three ways by which individuals invest money: -Gold -Real Estate -Marketable Securities i.e. Equity and Debt
However, with time the security markets have matured and do not provide any phenomenal returns. With this, a new kind of investment opportunity has arisen in the market that is an investment in the startups. According to a study in the US, around 70% of startups don't complete a 7 year period and close down. But with big risks, greater rewards are there as well. If one manages its portfolio of startups well, then it can make very good returns. Let us take an example - If one person makes the investment of ₹ 1 lakhs in 10 startups, which he/she believes will provide him/her good returns, for 2% equity. His/her total investment will be ₹10 lakhs. Going by the study, 7 startups close down and don't provide any or very little money. But the remaining three startups took off well. One startup raised ₹ 2 Cr for 10% equity after two years of our investment which takes the valuation of the startup to ₹ 20 Cr. That makes the value of our 2% equity around ₹ 40 Lakhs. Other startups raise ₹ 1 Cr and ₹ 80 Lakhs for 10% and 5% equity, marking their valuation to ₹ 10 Cr and ₹ 16 Cr respectively. That makes our investment worth in these startups to ₹ 20 Lakhs and ₹ 32 Lakhs. Summing up, with our total investment of 10 lakhs, angel investors and VC can get around ₹ 92 lakhs, in the period of 2-4 years.