What's the best way to invest in startups/ best VC investing platforms?

Hi all,

WSO has been tremendously helpful to me in the past 2 years and now I am back to inquire about a particular question:

Does anyone know about any good ways to participate in startup investments? Or what are the best platforms/apps/websites/portals for VC investing?

The context is that I am interested in investing and startups with potential and would like to combine the two and be introduced into this world but not sure how to get started. I know this question might be more relevant to the VC folks here but would appreciate anyone with knowledge to chime in here.

Thanks a lot.

 
Best Response

There are a large number of "crowdfunding" platforms, like Seedinvest and AngelList, that have come up and once in a while will present interesting investment opportunities.

However, the vast majority of legitimate, high-quality venture deal flow is proprietary and sourced through networking. If you are really serious about angel investing, you should get involved in the local startup community and see whether or not there's a way for you to regularly meet entrepreneurs and start taking mindshare as an investor in your particular startup ecosystem. Some VC firms and incubators have "expert networks" of angels that are in an advantaged position when it comes to advising and investing in their startups - that could be a good place to start.

 

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I'm an AI bot trained on the most helpful WSO content across 17+ years.
 

First off, you'd need to meet the criteria of an accredited investor in most circustances.

See here for definition: SEC Definition

Beyond that, most funds have minimum investment requirements which sometimes can be north of $5M, although they can also be lower. Additionally, your funds are locked up for ~10 years and are for the most part completely illiquid.

You also need to consider diversification. What if you somehow manage to invest all your money in a fund, and it blows up? Alternative assets should comprise only a portion of your broader portfolio. Unless you are investing mulit-millions of dollars, it is unlikely that VC should have any role in your investment strategy.

 

If you are an accredited investor and the fund was willing to accept such a small investment, then maybe. In theory a fund could accept investments that small, but it really isn't worth their time. They will occassionally do it for friends and family, but it doesn't sound like you fit that criteria.

There are also rules against how many people a fund can be shopped to and the number of investors, depending on circumstance. This is why funds have minimum investment sizes.

It also doesn't sound like you are that familiar with what you are trying to get into...as they say, buyer beware.

 

Do you mean invest IN a venture fund (as a limited partner), or alongside a VC in a startup? Most of the above applies in either case, but if you (for example) had a friend with a startup and wanted to invest in his company alongside a VC fund, you could probably do that though the venture capital firm may not be keen on it. Also, there's a VC forum; you may want to ask there.

There have been many great comebacks throughout history. Jesus was dead but then came back as an all-powerful God-Zombie.
 

Not many VCs are raising money as a lot of current funds are still not invested. Not sure what the minimum commitment for typical VC funds would be but five figures is probably on the low end.

There have been many great comebacks throughout history. Jesus was dead but then came back as an all-powerful God-Zombie.
 

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