Why you should invest in startups

When everything is public, the only way to make a lot of money is to be right when everyone else is wrong. The more people participate in the process, the less likely you are to be the only one in this crowd. At best, you’ll be right along with many others, which means that everyone will not earn much. 

That’s why it’s so hard to beat the results of an index fund. The only way to do it is not to try to be smarter than everyone but work on the opportunities not yet known to many people. You have to stay below the radars of the crowd, meaning investing in startups in the early stages. 

This gives us an essential rule of a smart business angel. If you are sitting in the room with a startup together with a bunch of other people, you are in the wrong room. Bye-bye investor pitch days :).

Leave a Reply

Your email address will not be published. Required fields are marked *