Investing in business (startups) - the best options where you can invest money for an investor + TOP-7 ways to invest in business projects

Hello dear readers of the financial magazine Rich Pro! Today we’ll talk about business investments, startups and other business projects, where and in which areas of the business it is better to invest.

After reading this publication, you will learn:

• For him, one should invest in business - the main advantages and disadvantages;
• What types and methods of investing in a business exist;
• What directions this year for investment in startups in Russia is better to choose;
• What are the risks of such an investment and how can they be reduced.

At the end of the article you will find answers to frequently asked questions about investing in a business.

The publication will cause interest in everyone who cares about the problems of investing in business. It will be useful for both beginners and those who already have experience with such investments.

What are the main pros (+) and cons (-) of investing in a business, what types and methods of investing in business projects exist, what are the risks when investing in startups - more on this and more

1. Why invest in a business and is it worth it

Investing in a business can provide a safe life for an investor. Such investments allow you to receive passive income. This is an activity that, when properly conducted, requires a minimum investment of effort, but at the same time provides a stable profit.

Most citizens living on the territory of the former Soviet Union have a misconception about long-term investments that can provide a stable income. They believe that only those who initially own can become an investorsignificant capital, certain talents and luck. In addition, our citizens are confident that investing in business is risky, especially in the current crisis situation.

Eventually most of our compatriots do not take any steps to increase wealth. They only dream all their lives of making big money with a minimum of effort.

Actually a chance to become financially independent everyone has. To do this, it is enough to fundamentally change your thinking, switch to the financial field, stop working for others and start working for yourself.

Investing in the development of your own business allows you to not only receive income, which is practically independent of the time and effort spent on it, but also gain confidence in the future. Moreover, high-quality investments make it possible to realize even seemingly unrealistic ideas and plans.

Moreover, in the modern world, even those who do not have a lot of capital can start working for themselves. Moreover, initial economic education not would need, because in the modern world you can find a huge number of areas for business development that are not related to the economy.

2. Advantages and disadvantages of investing in a business

The investment process is always accompanied by risk. Business investment in this sense is no exception. As in any other activity, such investments have their advantages and disadvantages.

2.1. Pros (+) of investment in business

Among the main advantages provided by investing financial capital in a business, can distinguish the following:

1. Investor gets the opportunity to influence the organization, as well as decisions made by management. Sometimes it is the investor who takes over the management of the company. At the same time, competent management allows you to develop a business and increase its profitability. Ultimately, the level of profitability of invested funds also increases.
2. Investing in a business is characterized by a wide selection of forms and directions for investing. You can invest in companies engaged in the production of goods that provide any services - the choice here is really huge.
3. The opportunity to become an investor with a small capital. At the initial stage, it is not necessary to invest huge sums of money. It is enough to purchase a small part of the company. If the investment is successful, you can later buy shares belonging to other persons.
4. If investing in a business is seen as a passive income generating activity, they are distinguished by simplicity and accessibility. An investor will not be required to possess any knowledge.
5. Investing in a business is one of the few varieties of investments in which assets have a real form.. The result of investment activity can be seen in the assets of the company.
6. Investing in entrepreneurship, the investor can choose a company operating in the field that is most interesting and familiar to him.
7. Income from such investments in the long run is unlimited. With proper business management and the achievement of a leading position by the company, there is every chance to achieve a monthly profit at a level significantly exceeding 100%. Over time, the better the company develops in which the funds are invested, the higher the level of investor income.

2.2. Cons (-) of investment in business

Despite a significant number of advantages of investing in a business, this type of investment has a number of disadvantages:

1. Investment in business is accompanied by a high risk of loss of funds. With the wrong approach to investment, you can lose not only a part, but also the entire invested capital.
2. Legal restrictions. Some types of entrepreneurial activity are significantly limited by legislative acts that control and other state bodies. Corruption is quite well developed in our country, therefore it is important to take this deficiency into account.
3. Unexpected developments. Entrepreneurship is far from always moving exactly in the direction in which owners and investors plan. There is a risk of unexpected events that make investments ineffective.
4. In the case of equity investment in a business, there is a possibility of disagreement. If there is a conflict between investors, and they fail to agree, one of them may decide to leave the business, taking their money. This will inevitably affect the profitability of the project.
5. If you use the option of active investment, you will need certain knowledge and experience. In this case, the investor will have the opportunity to maximize the possible income.
6. The return on investment in a business is often unstable. Profit in different periods of time can vary greatly, changing under the influence of a huge number of factors. Under absolutely identical initial conditions, different firms can bring different returns to the investor. Investing in a business, you have to constantly study the market and adapt to it. This is the only way to get the most profit.
7. Often, additional cash contributions are required. If you do not invest extra money in the business at a certain moment, you can get a significant reduction in the profitability of previous investments.
8. Profit will not come immediately. Since investments in startups are long-term, you will only get a profit after a sufficiently long period of time.

Thus, investing money in a business has its advantages and disadvantages. It is important to remember them and consider them in the process of investments.

Separation of business investment by characteristics

3. Classification of investments in business and their types

Despite the fact that investment in a business seems quite simple, it is very diverse, each type has its own nuances. Therefore, it is important to classify them.

You can do this for several reasons:

Feature 1. Ownership

According to the right of ownership, they distinguish between investments in their own and in someone else's business.

If the investor at the initial stage has sufficient capital, as well as knowledge, experience, and he wants to work for himself, you can invest in creating your own business. Many investors consider this option as the most interesting.

The advantages of this type of attachment are:

• opportunity to be realized;
• maximum profitability of investments.

There are disadvantages to investing in your own business.

Among them are the following:

• a high level of risk, since it can be difficult to predict the development of events when creating a business;
• the need to have certain knowledge and skills;
• not only material investments will be required, but also a significant investment of time and effort;
• great initial contribution.

As for investments in foreign business, this method is much simpler. In this case, you don’t have to personally deal with various organizational issues. After investing money, the specialists themselves will be involved in the project: to implement and promote it.

Sign 2. By the volume of investments

It is possible to classify investments in business by the volume (share) of investments.

In this case, allocate:

1. Full funding activities. In this case, the financial burden falls entirely on one investor. Such investment is most often found in the case of the development of one's own business.
2. Partial financing, which can also be called equity participation. In this case, the funds received from investors comprise only part of the capital of the formed company.

Sign 3. By the stage of investment

It is possible to classify investments in a business according to the moment at which investments are made:

1. Investments in startups are carried out at the very beginning of the creation of activities. In this case, there is an idea, the development of which is planned to be carried out using funds raised from investors.
2. Investments in existing projects. Often, the development of a business requires additional funds that attract investors. In this case, the company already exists, is engaged in a certain type of activity, has its customers, brings a certain profit.

Sign 4. In the form of profit

On this basis, we can distinguish active and passive income. In the first case, the investor usually also performs the functions of the head of the company. With passive income, coordination is shifted to the shoulder of a hired manager.

Sign 5. In appearance

According to specific characteristics, investments in business may be direct and portfolio.

• Direct investment is an investment in the assets of a particular company.
• With portfolio investments, investor capital is distributed between the shares of several organizations. Moreover, the totality of the acquired shares of various companies is called a portfolio.

The main classifications for ease of perception are summarized in the table:

Thus, there are a huge number of types of investments that are distinguished according to various criteria.

Popular ways to invest (enter) in business projects

4. 7 main ways to invest in business

Many believe that investing can only be in your own business. However, there are a huge number of options for such investments, differing in the degree of investor participation, the required amount and other parameters.

Below are 7 main ways to invest in a business:

Method 1. Own business

This method is usually primarily thought by those who hear the concept. business investment.

Using this type of investment, you will need to invest in activities not only money, but also your own strength and time. That is, this method of investing is an active income.

Return on investment does not begin immediately. But there is a significant plus for the investor - all profits will belong to him undividedly.

Many dream of their business. But it should be understood that not everyone is able to lead and develop it. Here you will need to invest soul, experience and knowledge, learn a lot.

Method 2. Equity in business

This option of investing and creating a business is one of the most popular. Most of the companies that occupy leading positions in the world appeared precisely thanks to this method.

The popularity of this method of investing is largely due to the fact that not everyone who has money can conduct their own business.

It often happens that way: one partner contributes almost all the necessary money, the other - manages the company.

Typically degree of influence as well as profit shared between partners in accordance with the shares in the business owned by them. So that in the future there will be no disagreements, it is desirable to stipulate all the conditions of interaction immediately and fix them in the share agreement.

Method 3. Investments in startups

In this case, investments are made in new projects. Most often, there is only an idea at the investment stage. At the same time, the one who developed it does not have money for implementation.

What is a startup, what types are, and so on, we wrote in a separate article.

An investor, investing in a project, assumes all risks associated with its implementation. For this reason, he takes most of the profit for himself (often up to 90%) The author of the project is directly involved in it.

This method of investing involves significant risk. In the creation phase, one cannot predict how the market will relate to a new product. A project can bring huge profits, or it can fail.

Method 4. Investing in stocks

The previous methods are direct investments in companies. A stock purchase is an investment through an intermediary, which is the exchange.

The stock is a security that confirms the investor's right to a small part of the company.

You can earn on stocks in several ways:

• speculative operations - buying at a lower price, selling at a higher price (We wrote in more detail about the game on the stock exchange in another material);
• if you expect a drop in the value of the stock, you should borrow it from a broker, and then sell it, when the price drops, buy and repay the debt. The difference in value forms a profit;
• receive dividends on shares annually or quarterly (sometimes their size is very small, it happens that they are not paid at all).

Owners of shares may participate in shareholders meetings. If the number of shares is large, investors can influence the conduct of the organization. However, most often they receive only passive income.

The cheapest are shares of new companies. However, the risk level for their acquisition is very high.

Before buying any securities, the investor must carefully examine the financial condition and statements of the organization.

Many successful traders earn on stocks and other financial instruments through this broker.

Method 5. Buying bonds

Bonds are securities that confirm that their buyer gave the company money on credit. That is, in this case, the investor provides the company with a special loan.

Bonds are securities for which the risk level is lower than for shares. You can earn on them by speculating.In addition, there is a constant yield on bonds - a coupon.

Since these securities are debt securities, they are considered more reliable. Even the owners of large packages of bonds do not have the right to interfere in the management of the company, they can only get their money loaned.

Bond risk lies in the possibility of them defaults. It is the higher, the greater the coupon income they pay.

It should be remembered that companies that few trust, increase the coupon yield on bonds in order to attract more funds.

Method 6. PIFs

This method is even more remote from direct investments. Mutual investment funds represent a certain set of various assets: securities, real estatemuch less often - assets of various funds and raw materials.

An investor acquires a share in a fund. He independently decides how to diversify risks and where to invest.

A huge minus of funds is too much dependence on the catastrophes of the stock market. At the same time, significant diversification of assets will not even help. You can also earn income by purchasing shares only during market growth.

The advantage of such investments is passivity. The investor does not need to do anything, the managers of the mutual funds work for him. Moreover, there are no commissions. All gains and losses are made up of the difference in the unit price.

Method 7. Hedge Funds

In the CIS countries, such an instrument is still poorly distributed. In fact, they are similar to mutual funds, but they can earn profits by speculating in securities, as well as in the form of coupons and dividends. Therefore, they may well generate income in periods of market decline.

Only large investors can participate in this method of investing. Hedge Fund Entries Begin from 100 (one hundred) thousand dollars.

Thus, there are 7 main ways of investing a business. However, if you look more broadly, absolutely all investments sooner or later get into the business.

Actual directions of investing in startups in 2019 in Russia, where you can invest money profitably

5. Investments in startups - TOP-13 of the best areas of 2019 in Russia, where you can invest

The start-up market in Russia is becoming increasingly popular, investment in it is growing every year. Therefore, it is important for everyone who decided to invest their money in business to know which areas of startup are considered the most popular.

Directions for investment are gradually expanding. However, over a long period of time, leaders are unchanged. These include IT projects (business on the Internet), as well as small businesses, including one that is conducted using franchises (For more details and details about what a franchise is in simple words, we wrote in a separate publication).

The energy sector is lagging a little behind the increase in investment. Oil prices are unstable, people are paying more and more attention to the environment. Therefore, in the field of energy, the most popular among investors are projects related to the creation of alternative environmental energy sources.

Let's figure out which areas of investment in a startup are the most popular at the moment. Experts believe that they will retain their leading position in the next 5 years.

1) 8 directions in IT

The IT sector is represented by a fairly large number of diverse areas.

Direction 1. Robotics

Inventors and investors spend a tremendous amount of time and money in order to achieve full control of processes through remote control, for example, in industry.

Another popular area of ​​robotics is social. In this sense, robotics is designed to help people with limited opportunities, as well as to conduct a program of their rehabilitation.

Direction 2. Programs for 3D printers

In recent years, 3D printer has become a breakthrough in the industry. That is why at the moment, the creation of programs that will ensure the most efficient use of these technologies is of great relevance.

Direction 3. Health Gadgets

This refers to applications that can be installed on mobile devices and turn them into a personal doctor or trainer, as well as a nutritionist. Today, investments in such projects are among the most popular on crowdfunding venues.

About crowdinvesting, crowdfunding - what is it, crowdfunding sites and so on, we wrote in a separate material.

Experts say that in the future, such projects will become increasingly popular. Not a single person can do without applications developed with their help.

Direction 4. Cloud data storage

Professionals say that in the coming years, investor interest in cloud technology will continue, as well as the ability to store huge amounts of necessary information. Nowadays, not so much convenience and an intuitive interface are put forward in the first place as the security of the downloaded data.

Experts believe that anyone who can develop the best program for conspiracy of information will easily conquer the market for such technologies.

Direction 5. Big Data

Projects related to the creation of programs designed for storage, as well as working with huge amounts of information, are still popular.

The main consumers of such products were and remain retailers.

Direction 6. Distance learning

This area of ​​investment is considered one of the most promising. Programs that allow you to receive distance education today are gaining immense popularity.

Demand for such services is at a very high level, so in the near future the development of such programs will continue, which means it will be profitable to invest in such projects.

Direction 7. Children's development applications

Every child has mobile devices in the modern world. At the same time, there are very few really interesting programs that allow you to learn them in game mode. Such projects are of great interest among investors.

Direction 8. Mobile consultations

Applications that make life easier for every person help him to effectively manage cash flows, time, education and other vital issues. Today, such programs are very popular.

At the same time, there are a huge number of such applications on the market. Therefore, any startup will have to try to find a truly unique product.

However, there are options, you can create such programs that will be as localized as possible, for example, suitable for residents of a certain city or district of a metropolis.

Directions of investing in small business

2) 5 directions in small business

The most popular startups are not only in the field of IT, but also in small business. Below are the most relevant ones.

Direction 1. Recycling

Environmental trends permeate every area of ​​life. Therefore, issues related to the processing of all kinds of waste are by far the most urgent for many people.

For these startups, finding money is not difficult. The necessary equipment and machinery can be taken both on credit and on lease. What is leasing we wrote in our previous material. Plus, such programs attract interests not only private investorsbut also different government agencies.

Direction 2. Computer training

All kinds of programs that allow people to learn how to program, create websites and animations, as well as edit videos, work with photos, are a very promising activity.

Direction 3. Outsourcing

Any novice entrepreneur understands the importance of companies providing outsourcing services. Such firms can save a significant amount of money and at the same time get quality service.

That is why many experts believe that outsourcing- this is the direction of the future.

Direction 4. Content translators

In marketing, the information provided is of great importance today. A huge amount of content is taken from various foreign sites.

Therefore, startups believe that content translation companies are one of the promising areas of development.

Such activities without fail will be quite in great demand in the field of Internet marketing.

Direction 5. Testing projects

Such a service allows one to check its effectiveness even before launching the project into the masses. Such an analysis makes it possible to market only those products that are competitive. As a result, at the start of the project, novice entrepreneurs can save a significant amount of invested funds.

Thus, there are several promising areas for investing in startups. Any investor should be guided by their knowledge and preferences, it is desirable to have an idea of ​​those areas that are planned to be financed.

The main ways of investing in startup projects

6. Investing in business projects - 5 main ways to invest in startups

When deciding to invest in startups, the investor must decide how he will do it.

There are several ways to invest startups:

Method 1. Through crowdfunding platforms

This method is ideal for beginners. Through such platforms, you can distribute capital between several projects by investing a small amount in each of them. This option will help a novice investor gain initial knowledge and experience.

Making a profit with such investments is possible in several ways:

• in the form of royalties, which means interest on profits;
• with the so-called public lending, after a certain period of time, the investor returns the invested funds along with interest;
• when using equity crowdfunding, the investor receives a share in the organization.

Investors using this method should understand that it is quite risky. There is a chance that the project will not be implemented.

In addition, Russian law does not define a clear attitude to such an investment. Any guarantees are provided only upon the acquisition of shares in the company.

Method 2. Business Angels

With this option, it is necessary to regularly deposit funds in order to receive a share or a discount on the purchase of shares when the next stage occurs. Traditionally, the amount in the range from 50 (fifty) to 300 (three hundred) thousand dollars.

Support is often provided to startups that do not have a budget for a prototype product. As a result, investment risks increase significantly.

Therefore, angels with significant experience, in order to diversify risks, invest in several projects at the same time.

To invest in this way requires knowledge of the business sector in which the funds are invested. This will allow a competent assessment of the submitted projects.

Method 3. Clubs of investors

At the same time, the investor transfers money to the club, which, at its request, searches for the project. For this, the club charges a commission from the investor. The investor significantly saves personal time and at the same time he can control the whole process.

This method of investing in startups is suitable for beginners. Thanks to its use, a novice investor gets the opportunity to participate in large promising projects with a small capital.

When participating in the club there is also a risk of loss of funds. Most often, it is associated with the dishonesty of the club, which increases the number of operations, significantly lowering the requirements for projects to participate.

About how to find an investor for a business, as well as what rules to follow when looking for investors, we wrote in a separate article.

Method 4. Investment in venture funds

This method is a passive investment. The investor only has to pay a commission, the rest will be done by specialists.

Disadvantage This way of investing is that it is poorly developed. It is difficult to find companies that have been successful in several investment cycles.

Moreover, often venture capital funds put investors in a tight framework: the minimum investment is usually at the level of 500 thousand dollars.

Method 5. Creating your own venture capital fund

Investors who have 10 million dollarsAs well as the ability to maintain a team of professionals and rent an office, they can try their hand at creating their own fund. Such companies most often invest only in high-quality prepared projects. However, most often no more than 30% of which make a profit.

With this method of investing, the risks are highest. However, if successful, the income will also be the largest.

There are a lot of difficulties in creating your own venture capital fund, first of all, they are associated with the poor development of this area in Russia.

Thus, there are several ways to invest in startups. The investor should choose the appropriate one, focusing on experience, the amount of capital, as well as an acceptable level of risk.

A step-by-step guide to investing in your business

7. How to start investing in your business - step by step guide

A huge number of factors influence the development of a business. First of all, psychology, as well as technology entrepreneurship.

Properly organized activities have a direct impact on the successful start and further development of a business. Statistics confirm that about 90% projects become unprofitable in the first 2 (two) years of its existence.

Moreover, the reason is not always the reason for high competition. Most often, bankruptcy is associated with the lack of a clear plan, as well as a development concept.

Instructions for beginning businessmen will help minimize risks, as well as increase the chances of a business becoming profitable.

Step 1. Decide on the area of ​​activity

Professionals say that finding a business that suits you is not easy. This is real art.

Do not be afraid to start something unknown. It should be understood that most often beginners and pioneers get biggest profits.

Moreover, if you find a promising area of ​​business in which no one has worked yet, you can not only earn large sums of money, but also gain fame all over the world. At the same time, age, as well as the level of knowledge do not matter.

You can, of course, choose and less risky ways. To do this, it is enough to apply existing business schemes. Do not be afraid of those areas of activity in which there is enormous competition.

the main thingso that your project is in steady demand. For example, the existence in the metropolis of a huge number of beauty salons cannot cause losses for another of them, since this service is in great demand.

The main task at the beginning of any business is to create such an offer that will be unique in the market. It should be intended for a certain group of consumers, it is their needs that need to be met better than other companies.

Step 2. Choosing a tax system

Any business is related to paying taxes. In Russia, the tax system provides for the possibility of using companies related to small business, a simplified taxation scheme.This allows you to reduce the financial burden (For a simplified taxation system for entrepreneurs, read the special article).

However, it should be noted that it is much more profitable for low-profit companies to choose the main deduction scheme, since in this case the tax calculation is based on the profit received.

Step 3. Registration of activity

Anyone starting a business can choose the appropriate legal form. In this case, one should focus on the amount of invested capital, as well as the planned scheme of doing business. Most often, representatives of small business companies can choose one of two forms of registration: LLC or IP.

Which option is better should be decided for each specific case. So, when registering individual entrepreneurship, the procedure is much simpler. In addition, conducting business as an individual entrepreneur implies a minimum of reporting. For those who are just starting to run a business and poorly versed in accounting, this option is most preferable. Registration of an individual entrepreneur will take about a week, while the fee is about 1000 rubles.

When the company's turnover increases, it will be necessary to carry out a re-registration procedure. At the same time, an LLC is opened, which is already a legal entity, which means it has the corresponding rights. At the same time, the reporting provided is much more complicated, and responsibility is also increasing. For the registration of LLC will have to pay a fee of about 5,000 rubles.

Step 4. Opening a current account

Any activity on investing capital in a business involves cash flow. Its directions may be different: replenishment of assets, payment of bills, revenue. Therefore, IP or LLC must open a bank account.

Some novice businessmen decide to use an account open to an individual. However, it is wrong to mix money related to doing business and personal finances.

Opening an account, just select the appropriate bank. The rest will be helped by bank employees. Some credit organizations offer to open a checking account using the Internet (online). At the same time, some banks can bring ready-made documents to a convenient address.

Step 5. Getting Started

As soon as the idea is developed, and the previous steps are completed, you can begin to implement the project. For this, it is advisable to prepare a detailed business plan. Do not ignore this stage of creating a business, otherwise the risk of unpredictable development of events is great. How to draw up a business plan for small businesses, we wrote in a separate material.

A documented development strategy will help minimize risks. In the event of unexpected turns of events or at the beginning of clashes with competing firms, it is a business plan that will help find a way out of a difficult situation.

When the plan is completed, you can proceed directly to business. To do this, you need to establish relationship with suppliers, by consumers, by customers and buyers.

It is important to be prepared for the fact that the establishment of a business is gradual process. Therefore, it makes no sense to worry if things do not go uphill at the very beginning of the business. Getting started is always difficult. Gradually, experience will come and it will be easier to navigate the business.

Novice entrepreneurs should not be careless about the instructions presented. Following the steps and following their order helps start a business more efficiently.

What risks can an investor face when investing in a business?

8. The main risks when investing in a business and how to reduce them 📛

In any investment process, two parties are involved - the investor and the business owner.

Investor goal - choose a business, investments in which will help not only not to lose capital, but also increase it. It turns out that the risk of investing is important for the investor.

Company Owner Purpose somewhat different - to attract money into the business and not lose it. This type of risk is important for finding investors.

It turns out that both participants in the investment process have a common task - to minimize risks.

The most important investor risks include the following groups:

• organizational;
• legal;
• economic;
• financial.

Risk can be managed if relations in the process of investing a business are fixed in an investment agreement. On the Internet you can find a large number of samples of such agreements. However, in reality, there are often situations that do not fit into traditional patterns.

Therefore, when investing in a business, it is best to seek the help of professional lawyers. This is especially true for direct investment agreements.

In this case, if the investment project fails, the investor will have the opportunity to get back at least part of the invested funds. And with the success of the event, he will receive all the profits due to him without any problems.

Before investing in any project, the investor should independently analyze it, or involve specialists for this. It is important to evaluate correctly how effective the project is.

No less important is the verification of the source information, as well as the conditions of the project and the likelihood of its success. In addition, it should be estimated after what time payback will come.

If the business owner provides the investor with a business plan, it is important to conduct a thorough analysis of all its sections. Especially careful one must be with those business plans that promise too high a level of income. Often there are errors in the calculations, moreover, if you want to cheat, there may be falsification of data.

Business investment always includes 2 (two) components - this is cashowned by the investor and capital directly to the project owner. It is important at the initial stage to immediately determine whether there is enough money to implement the plan.

If the investor understands that the business plan involves the participation of the owner himself, it is important to find out if he has enough money or if there are options where to get it. In this case, the investor insures himself from the need for additional cash contributions.

Thus, before investing in business projects, you should carefully study the scope of the business. If the investor does not understand in this topic, or he does not have specialists who have sufficient knowledge in the presented business field, it is not worth investing in the project.

It is best to invest in a business that you understand or that is simple enough for investors to understand. Finding a businessman who needs money is no problem. The investor, in the first place, is the effectiveness of the project.

It is important to invest in such an enterprise, which is well-organized, will bring profit in the future. Otherwise, the money may not be returned.

Also, professionals recommend that investors necessarily go to production either in company officein which you plan to invest. Often this helps investors make the right decision about the possibility of financing the project, as it helps to visually assess the organization of business in the company and in the workplace.

9. Frequently Asked Questions (FAQ)

Investing in a business is a rather complicated process, therefore a large number of questions inevitably leads to the emergence of a large number of issues. Let's try to answer the most frequently asked of them.

Question 1. I want to invest money in promising young startup projects. How can I do that?

In the article itself, we already answered this question, so we will answer it more briefly and meaningfully.

There are several ways to invest in startups:

1. Invest through crowdfunding platforms (starttrack.ru, mypio.ru);
2. Qualify as a business angel. That is, investing money in various business projects in the early stages, for a share in the company or convertible debt (when an investor in the future acquires shares with a "discount"). The size of angel investments, as a rule, is from $ 45-50 thousand to $ 300-350 thousand.
3. Invest through clubs of investors. In this case, investors give the club their parameters and characteristics (preferences) for the investment object, the club finds projects according to the necessary parameters and prepares the transaction, where it receives a commission for it. The club has full control over the transaction. (altaclub.vc, common.skolkovo.ru/ru/espace/investors, smarthub.ru)
4. Transfer funds to the management of a venture fund. Thanks to professional and competent selection of promising projects, investor risks are significantly reduced. The venture fund itself works with startup projects, and the investor pays a fee for managing money and receives dividends.
5. Create your own venture capital fund. To create a venture capital fund, it is necessary to create a company, rent an office (commercial premises), maintain a professional team and have investment capital, at least 10 million dollars. Typically, such funds invest in more mature and developed projects than the same business angels. As a rule, the transaction amount is in the range from $ 1 million to $ 5 million. (moreover, about 70 percent of all invested projects, as a rule, do not bring profit).

In a separate article, we also talked about ways to invest on the Internet in more detail.

Question 2. Where to look for startups?

If you decide to independently find a startup project and invest money there, we recommend using our recommendations.

1. Register in start-up databases as an investor

In these databases, you can filter startup projects by niche (choose the tourism industry, IT, etc.). As a rule, the description of the project is well structured in the databases, since all projects undergo a minimal moderation of the resource. The advantage of such a search is a quick and clear comparison of startups.

There are a lot of such sites in the world, but we recommend:

1. Angellist - the main world service for searching for investments and startups (it is the founder of the field of startups), on the basis of which a large number of clones were created. The service database contains more than 1600 startups and 380 investors from the Russian Federation (and their number is constantly increasing)
2. Starttrack.ru - This is a crowdfunding platform that has the functions of a startup base. The platform allows you to conclude syndicated transactions. Transactions are carried out including at private meetings of private investors. As a rule, investors who are ready to invest in the project from 300 thousand rubles are invited to such events. The database has about 800 investors.
3. Spark - A service for finding an investor, but recently new interesting and technological projects have been uploaded there, where the creators share their experience and upload projects for investment. There are about 4,500 projects in the database, where about 1,500 need investment.

2. View information through open startup databases

Here you can watch projects that have already attracted investment.

1. Crunchbase.com - One of the largest databases on the venture capital market, which contains more than 700 thousand profiles of investors and startups.
2. Rb.ru/deals/ - Russian site with a chronology of transactions, profiles of private investors and startups, funds, etc.

3. Follow the finals of competitions

During the competition, each project withstands fierce competition and jury assessment. As a result, only really high-quality projects remain. Which deserve the attention of investors.

It is recommended to follow various competitions among startup projects and regularly attend them. This may include -GenerationS, Web Ready, Russian Startup Tour and so on.

4. Keep track of accelerator releases

Also watch out for accelerator releases.Accelerator- this is a company where the activity is to help other companies (residents of the accelerator). Accelerator help is the development, promotion, recognition of the company (brand), etc.

The accelerator is a program that allows you to quickly develop a project from the moment it occurs to the moment when they become interesting to the investor. The projects that have reached the end are the strongest, because they managed to overcome several stages of selection.

Accelerators earn money by reselling the shares of the company that were received (redeemed) in the past.

Accelerators include the following - Accelerator IIDF, iDealMachine, "MetaBeta" and others.

Investors should be aware that the success of an investment is determined, among other things, by the store of knowledge. Even participation in the club does not completely free from risks.

Checking a startup before investing

Question 3. How to check a startup investor yourself?

To get an objective opinion about the proposed investment object, you need to perform a series of actions. They are united by the concept DUE diligence. Such actions are important to carry out before making any investments, buying a company or merging it with another company.

Due diligence effective in the process of deciding on any cooperation with any company.

Despite the importance of this procedure, many investors ignore it. However, due diligence helps investors save most of their capital, so consider the actions that should be taken.

1) Product

The investor must most try a product or ask a friend who reaches the target audience to make it.

No less value has an attempt to sell the product to any of the acquaintances. As a result of such actions, a huge amount of unnecessary things will probably be eliminated.

2) Team

It is important to carefully study the main actors (founders) of the project. To do this, you can use the social network Facebook, LinkedIn, etc. ... Here you should evaluate the profiles of people, find them on other networks and try to understand what unites them.

So you can understand how investor is willing to cooperate with such people. Another tricky move - invite someone for an interview. During it, it is quite possible to draw a huge amount of information about the company with which it is planned to interact.

3) Investor

It makes no sense to ask other investors for an opinion on a project. It is unlikely to be able to get a reliable answer. It’s better to do otherwise: call an investor who is not connected with you in any way and offer become a co-investor. Most likely, in response you will be able to hear a true opinion.

Thus, it is quite possible to evaluate a project for investment on your own. The main thing is to adhere to certain rules.

Question 4. What are the features and procedure for drawing up a business investment agreement (investment agreement)?

Conclusion of an investment agreement represents an important stage of investment in any business. It is an agreement concluded between the parties to the transaction, which are the investor and business owner.

The purpose of signing such an agreement is to regulate the relationship between the parties to the transaction, primarily in relation to how expenses and revenues will be shared during the implementation of the project.

For each of the parties to the agreement in the contract in mandatory planned should be fixed income and costs.

In accordance with the contract under review, the parties to the transaction undertake to make common efforts to implement the investment plan.

It is important to notethat the main task of the investor is to invest, and the business owner is to use them exclusively for their intended purpose in accordance with the business plan of the project.

An investor may have a different status: legal or natural person. He invests in a specific business project. The purpose of investing is, first of all, to receive income in any form. In this case, the investor assumes certain risks. They are related to the possibility of lose money, both fully and partially.

The business owner’s task is to raise funds. Moreover, the purpose of such actions is to achieve a certain result in the course of investment activities. Under such activities in the financial world understand the actions of investors, consisting of a practical and analytical component, which are aimed at achieving the goals set in the plan.

Prior to signing the investment agreement, it is important to carry out a number of measures:

1. Negotiations must be carried out without fail. During their implementation, the investor and the business owner must determine mutual obligations, as well as the procedure for the distribution of income and expenses. The result of the negotiations is the conclusion of an agreement.
2. The project owner must draw up a business plan designed for the investor. Without fail, this document should consider: analysis of the most important competitors of the company, the product market as a whole, as well as the niche occupied by the company. Equally important are financial calculations, including the perceived risk. It should also describe what is valuable, relevant proposal and what is its novelty. At the end of the business plan are the project prospects, as well as possible scenarios.

An investment agreement is legally binding only if if it will be concluded in writing. This should be done only after negotiations are held and a business plan is drawn up.

If the parties do not come to a mutual decision on any issues, they should draw up a protocol of disagreements. Subsequently, this document is of great importance, especially at the stage of signing agreements. At this point, it is considered an integral part of the agreement.

You can find a lot of examples of investment contracts on the Internet. They are slightly different from each other.

Typical business investment agreement - download the investment agreement below at the link

Download a business investment agreement (investment agreement) (doc., 15.2 kb.)

However, there are points that must be present in each contract:

• a description of the legal status of each party;
• listing of the most important terms used in the agreement with the mandatory definition of all concepts;
• a specific reference to the subject of the contract - what kind of investment project is it with the name and description of the projects, its main purpose, should also indicate who is the developer of the project;
• for how long is the contract concluded;
• how are payments made under the contract. If the parties have reached an agreement on the investor’s right not only to the main, but also to additional remuneration, this should be stated in the contract;
• rights acquired by the parties;
• what obligations do the parties have in case of signing an agreement;
• how the investor will receive the result of investment activity;
• what are the property rights of each party after the results of investment activity are obtained;
• what responsibility during the implementation of the project is each party;
• how the contract can be terminated;
• how changes are made to the concluded investment agreement;
• reference to force majeure circumstances;
• how and where are disagreements arising between the parties to the agreement resolved.

The following must be attached to the investment contract:

1. Act on the distribution of property rights between the parties;
2. disagreement protocol available;
3. protocol for reconciling developed disagreements.

It is usually difficult for an investor and business owner to draw up a contract that would satisfy both parties and take into account their personal conditions. Therefore, the best solution is to take the help of a professional lawyer.

10. Conclusion + video on the topic

We examined the main issues and issues regarding investing in a business. If you read the article to the end, you probably learned something new about investing in a business. Now you can test the acquired knowledge in practice.

In conclusion, we recommend watching a video about the features and nuances of investing in a business from Oleg Ivanov ("Business Environment"):

And the video - “Why invest in startups” from the channel “Capital FM”

The team of Rich Pro magazine wishes good luck and success in investing in a business. If you have any comments or have questions about the topic, then ask them in the comments below. We are waiting for you again on the pages of our site.

Watch the video: Investing For Beginners. Advice On How To Get Started (November 2024).