Investing in startups may seem like an opportunity that exists only for those who have the desire and ability to spend several million on the creation of new technology companies located in the garage or dorm rooms. Despite the fact that this type of investor exists and is certainly important, not all beginner investors are super-rich titans of the financial industry. Some are ordinary people who want to get into the business that they believe in — even at the first stage or creation.

What you need to know to invest in startups

Before you start investing in startups, you need to understand that not a few startups become losers, and investors lose their money. Yes, this is risky, but also a highly paid type of business. Investments in start-ups, differences from other types of investing money, have a difference — you can take your finances back if the authors of the startup project were unable to collect all the necessary amount. It should also be remembered that working with startups is different from investing in stocks — they cannot be sold. You need to be patient to keep your money until the startup is public or someone buys it.

Why invest in startups?

Investing in startups is not the safest way to invest. This can be very risky. In fact, many startups fail. Thus, investing in startups is most likely not a way to secure yourself a pension or make money on purchases, such as a house, of new cars. Instead, startup investments are for people who want to take the risk of investing in companies that they truly believe in. It’s about investors who trust the people behind the idea and about the goal of the company. They want to help the company achieve a result — and, of course, get some profit in the process.

Ways to invest in startups:

1. Investing in startups through investment platforms

As a rule, one of the best ways to invest in startups for investors is one of the many investment platforms focused on startups. Several platforms are available, but most of them work in a pretty similar way.

2. Investing in startups of friends

One of the best ways to invest in startups is to find a personal connection with a startup that is looking for funding. Many startup authors rely on the support of family and friends, especially in the early stages of funding. Friends, family members or partners who are in the process of launching a startup will most likely welcome your investment.

3. Crowdfunding

Crowdfunding basically means “public finance”. It is based on voluntary contributions from interested parties in order to benefit from this in the future. After accumulating the required amount, investors expect to receive benefits. It can be expressed both in tangible and intangible form, for example, in the form of an opportunity to get the author’s book before it arrives in stores.

4. Crowdfinvesting

Unlike crowdfunding, investors receive a share in the startup’s share capital with the risk of losing the amount of investments, since the due diligence procedure, mandatory, for example, for an IPO, is essentially not carried out. This type of fundraising is attractive for small companies that are not interested in venture funds or business angels. The advantage of crowdinvesting is an easier way to receive funds compared to bank lending.

Let’s take a look at the opportunities of investing in AMZCoin.