It is common when we talk with new investors or traditional investors, to face the question Why invest in startups? Investment is one of the most important components in a startup ecosystem, but is one of the most difficult components to develop.
There are many reasons to invest, but some of the most common are:
1. To develop the local entrepreneurship ecosystem and generate economic growth based on high technology companies.
Most of the people with enough money to invest have strong commitment with the community; the majority of them want to be related with local organizations because of a high sense of social responsibility. Investment is real, tangible and an objective way to help communities, it can drive to new companies, new jobs, and new opportunities.
2. To attract talented people, mentors, other investors and new companies.
The base of economic development is the people involved in it, their culture, capabilities and their values. The entrepreneurship is a road for talented people with vision, innovative and experienced in new technologies, ergo, they can help to grow the culture of local people.
3. Is profitable! Yes still being a good business. 2-3x in 5 years (don´t compromise).
There are many options to invest, but today, one of the most profitable is “High technology” based startup. There is a higher risk, but the impact and benefits can be bigger and faster than any other investment options.
4. You can be part of a success story or a great product.
A person involved in “Startup-founding” is a person with ambitious goals, trying to develop products for the world. Being part of that is rewarding.
5. Startups are highly risky but highly potential projects.
The potential of the projects by definition and strategy is bigger than any other projects.
Being a startup investor is a business, not a hobby. If you want to get on board, you better be prepared to take decisions, confront risks, and develop the vision to win.
Do you know another good reason to invest?