Investing in startups is now a day in trending, but here the question arises that where to invest and how to make money in startups. Many people fail in the beginning because of lack of resources and money. One reason for failure is lack of market need because many investors earn money with experience and specific directions. In order to get successful in the market there is a need for smart money instead of money. A smart money is the money that refers to that investor who is more intuitive and knows more about the movements of market and also knows how to gain the business health. In other words smart money refers to that investor who knows the correct time to buy and sell the assets because they are well known of opportunities. He calculates all the profit and loss before taking any step. Another and most common reason for failure in a startup is teamwork among individuals. If the company gets lost in the beginning, then the people working in your company may leave your work or start fighting and patience is required in a startup.
For investing in a startup here is the 2 golden rules:
- “Before investing think be sure he is taking a risk with his / her money, and do not invest more than you cannot afford to lose in investment”.
- “The world belongs to dreamers, but dreams are divided into two: your dreams and the dreams of others, know the difference and walk on yours.”
(Read more quotes of Rami Beracha here)
The thing to know before investing money is mentioned below:
Invest in that field that you are well aware of, as this is the best way to reduce the risk of losing money. Moreover, understand the market that startups operate in as it will give strength to your business idea. But make sure that your business idea has a scalable model so that you can earn more profit.
Expand your investments instead of saving money or putting the bank put and expands with the money you have earned. As it will increase the chances of success and also reduces the risk. It will also increase the chances of getting money back. Moreover, these investments are a long-lasting investment so as mentioned above try to be patient as much as possible.
It is absolutely important that explore the market to see what is trending in the market, what is competition in the market for startups and what are the challenges that one has to face after entering into the market. Moreover, make sure that the startup should be open in the big market. The team who is founding startup should have a focus on customer development that what customer needs. They should extract what customer is demanding from you? For this purpose, the best way is to take feedback from the customer as this is the key to remove the errors from your product. The business idea is not as important as team management is.
Ask Rami questions here through his Twitter profile