The world is becoming much more convenient today than it was a few years ago, and a large part of that convenience is due to startup companies. Need a ride? Call an Uber! Want an answer? Ask your Alexa. No matter what your need is, you can get that done while sitting at your home. In the last few decades, there have been many startups that have turned traditional industries on their heads, and the average consumer has access to solutions for big problems at their fingertips. This shift is all possible because a few investors took a risky bet a few years ago on fledgling companies and helped them get their ideas from paper to reality.
What is Startup Investing?
Startup investment is where investors buy a piece of a startup company with their own money. The investors put down their capital in return for the equity, which is a portion of ownership in the startup company they are investing in. By doing so, investors form a partnership with the startup they have invested their money in.
What are the benefits of investing in a startup?
Over the last few years, investors have been more inclined to invest in startup companies, and here are the reasons why investors are choosing this path:
Returns
The major reason for this rise in investment in startups is that startups can potentially yield outsized returns, which far exceed returns from any other type of investment. And the returns are great if an early investment is made in a very successful startup. Imagine being an early investor in Google or bitcoin!
Diversification
By investing in startups, investors get a very diversified portfolio which includes high-risk and high-reward asset class.
Entrepreneurial Community
Here investors get a wide range of options to support new entrepreneurs and help those companies that they think are going to succeed.
Networking
By investing in startups, investors automatically get a platform where they get a chance to connect with other investors, founders, and active members of the community.
Relevance
Investing in startups is a new way of staying up-to-date with the latest trends and emerging top startups.
Who all owns Equity in the Startups?
Often investors, startup founders, and employees own equity in a startup. Initially, 100% of the equity is with the founder. But gradually, they keep giving away their equity to investors, co-founders, and employees of the company. The complete decision of dividing the equity amongst others is taken by the founders, co-founders, and stakeholders of the company who are working together to take the startup towards its successful growth.
Mack Capital
If you are someone who is looking to invest their money in today’s growing startups, then Mack Capital is here to help you. We are a full-service private equity firm with the vision of providing investors numerous opportunities for a quality investment. We focus majorly on helping investors build wealth for our limited partners and that too within the community itself. Our team has great expertise in identifying key investment opportunities. We work diligently in offering the best of our services to people in the industry and accredited investors.