Investing in startups may be a way to become rich but it also may be a way to become poor. Startups have very high failure rates .If you have just started investing or willing to invest be careful and do proper research. You may also end up having empty bank account with an story to tell everyone.

If you really want to invest you should know the idea of the business and the potential of the people involved in the business.

Things to know before investing:

  1. The Founder’s Potential.
  2. The Management team and their Potential.
  3. The fundamentals of the business
  4. Market of the business
  5. Financial requirements and future plans of the business

The founder is the source of the idea. His ability to take team forward and execute plans will always pay for you. The startups further growth will always be related to the potential of the founder and his ability to tackle down issues. You are actually not investing in business but you are investing in the idea of the founder and the skill set of his team. The fundamentals of any business should be key point for any investor because only this leads to success either it is product based startup or service based startup.The market of the business is also very important. It will help you understand who are the big players of the market in that field. How is idea of the business different and how will it catch consumers eyes. Financial requirements of the business and ability of the founders to draw the investors attention will help the startup to survive for longer and expand and execute it’s plan. So if you are an startup investor and you have the idea how much this startup needs and it’s future roadmap you can understand how will it proceed and how fast.

So if you are first time investor be cautious while investing. Focus on your financial goals and business field are aware with. Above all you will be winner are loser so play wisely.