Now that investors can put as little as $250 into startups, examining some of the most significant venture capital investments ever made is worthwhile.
In 2012, Snapchat was one of the hundreds of social media apps that attempted to compete with Facebook and Instagram. At that time, it struggled to attract even 100,000 daily users. Despite this, venture capital firm Benchmark believed in its potential and invested $13.5 million.
Five years later, Snapchat launched its initial public offering (IPO), and its stock price soared to $33 on the same day. At that moment, Benchmark made history. Its stake was now worth $2.9 billion — the venture capital firm earned $22,000 for every $100 invested.
This example captures the upsides of startup investing. With traditional investing, you need to be right hundreds of times to get moderate gains. With angel investing, it's enough to be right once, and you could be set for life. The downside is the risk, but venture capital firms are proof that it can be managed.
Investing in startups willy-nilly probably won't get you far. Thoroughly researching a startup — including its leadership and the market — before deciding which emerging companies to support is a different ballgame. That's how you can minimize the luck factor and potentially make the losses irrelevant in the long run.
Another great way to do that is to spread out your investments. You only need one winner, so acquiring shares of multiple startups seems like the safest way to go. Adding them to your portfolio is as easy as booking a vacation rental. Through equity crowdfunding platforms, you can quickly gain exposure to companies that have decided to avoid venture capital (VC) firms.
When Benchmark made its historic investment, you couldn't legally invest in a startup without a hedge fund, a venture capital firm or another type of institution. But today, you can do so with as little as $250. Here are three you can partially own by the end of the day:
1. Jurny is the industry's leading vertically integrated, artificial intelligence (AI)-powered property management solution for streamlining every aspect of short-term rental operations. Backed by renowned VC firms Mucker Capital, Okapi Venture Capital, VITALIZE Venture Capital, Singularity Capital and SaaS Venture Capital, Jurny has raised over $13 million to fuel and transform the rapidly growing vacation rental industry.
2. PlayersTV Digital is a new sports media company built out of a vision to disrupt the conventional hierarchy of the industry. Despite being a newly formed entity, the expertise exhibited by PlayersTV Digital’s founding team makes the company anything but a rookie in the sports media landscape.
3. WebStreet is a fintech platform that allows people to passively invest in fractional shares of online assets such as monetized websites, micro SaaS and e-commerce storefronts.
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