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Exploring New Opportunities in the Startup Investment World

11 February, 2015 | Article Source: Raj Srivastav  |   (No Comments) | 23,085 Views

Exploring New Opportunities in the Startup Investment World

Exploring New Opportunities in the Startup Investment World

A key buzzword in today’s startup scene is “democratization” i.e. spreading the power so that more people can control technology and achieve their goals. It’s a concept which the internet and mobile technology naturally encourage. We can easily break down barriers and provide new avenues to success thanks to the ubiquitous access and usability of web & mobile.

Democratization is a common word to hear in pitches and descriptions of startups—democratization of travel, democratization of education, etc. When pitching to investors, entrepreneurs use the phrase to frame their business as more of a consumer-oriented service, something that can achieve mass appeal and rise above the more sequestered competition.

Democratizing investment

One interesting trend we can see today is the democratization of investment. Like anything else, modern technology is making it easier for people to invest in businesses, whether that means organized Venture Capital, Angel Investment opportunities, or even the new trend of crowdfunding. Given the overall trend of democratization, it should come as no surprise that there are new systems and services out there which enable investment, and this has a big impact on the world of startups.

The startup industry is reliant on investors. Without the capital, a business simply can’t start. Some founders fund their projects on their own, but in most cases there are outside investors involved, and finding those investors is a major hurdle for new businesses. It’s a mutually correlated thing: if the startups sector is growing and succeeding, then investors succeed, and if investors are doing well, then they can fund more startups, and the cycle continues. The more investors that are out there seeking opportunities, the more successful startups will emerge. Democratization of investment means more resources for startups.

AngelList Connects Investors

As it happens, both investment and startup culture are booming here in the Silicon Valley. And the investment landscape is changing to allow for greater diversity and more opportunities. One of the big players in this democratization of investment is AngelList.com, which allows investors to make investments into startups via an online community. Explore their list of top investors and you’ll see lots of big names have made use of the service: Marissa Mayer, Marc Andreson, Ashton Kutcher to name a few.

AngelList allows people to make relatively small investments, usually in the $25-100k range, but there is a lot of variation, it simply depends on what the investor is ready to give. Startups simply publish a page on AngelList which shows off their business/product, and investors can apply to give funding.

Don’t Forget Crowdfunding

And of course, one can’t forget about crowdfunding websites like Kickstarter or IndieGoGo, which allow niche products to get free funding straight from customers who share passion for the project. These tactics tend to support the creation of products, usually creative products, rather than businesses, but the idea of crowdfunding has proven to be successful.

In both situations (AngelList and crowdfunding sites), the startup markets itself to investors in a mass-awareness campaign, rather than pitching one by one—though it should be noted that pitches and traditional networking are still the primary driver of new investments, these new tools are simply alternative avenues to success which are arising thanks to the “democratization” trend.

I guess the short analysis of all these innovations is that now is an incredible time to be a startup, with numerous paths forward to achieve success. And it’s a great time to get into the investing game, with resources available that will let you dip your feet, or dive right in, whatever works for you. People on both sides of the equation should be utilizing these tools, and together, everyone benefits.

If you’re putting together a pitch or marketing campaign for your startup, SDI offers a wide array of services and assistance to help you ensure success. Whether you’re looking for prototyping, web design, or even just some hot connections in the Silicon Valley tech networks, feel free to give us a call at 408.802.2885—if you’re in the south bay area, we can even get you into our office for a chat.

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