As an investor, you can provide the necessary funds to help these entrepreneurs realize their business idea, and the best part is that you can profit from it too. If the business takes off, you can get profits with your equity shares. When the time is right, you can liquidate your shares to cash in on your profits.
Where does online investment fit in?
The internet has already been used for several years as a platform for trading. In the past decade, online investing has become a norm among individual investors, and you can find most brokers offering online services via their own trading platforms. With this kind of convenience in place, it only makes sense to extend an investor’s powers to startup investing. This form of investing has been reserved for wealthy investors, but the internet can allow even the average individual investor to take part in this form of investment.
There are several websites available that act as a community in which entrepreneurs can put up their idea and explain it to prospective investors. They can convince the investors about the potential growth of their business idea and the profits in store for them.
If the investors are convinced, they can choose to put in a certain amount of money into the business. Once the total amount of pooled money is equal to the estimated capital required for the business, the entrepreneur takes care of the rest. Of course, the process of choosing the right startup to invest in is quite tricky, and that is where the risk lies. Despite the risks, the fact is that the right choice can also ensure that you earn a tidy profit from your investment.
The South African business environment has not been very kind to startups that were powered by angel investments, but this is changing rapidly. A growing number of entrepreneurs have begun to trust angel investors and are opting for it as their source of capital. As an investor, you can hop onto the bandwagon and get your slice of the action too.