While investing in established, listed companies is a tried and true method for accumulating wealth over time, sometimes we want a little more. Some of us may be natural risk-takers with a tolerance for all-or-nothing investments in speculative ventures. And some of us may just want to have a stake in something like a tech startup which we’re more passionate about than another bluechip that’s just doing the same thing year-after-year.
But knowing where to turn can be hard. Without highly visible exchanges and brokers waiting with open arms to handle our transactions, there’s sometimes no obvious path like there is with traditional investing. This can be especially true when it comes to investing in fast-moving tech startups that can accelerate through multiple rounds of funding faster than you can say Series A. To illustrate just how fast this can be, Palmer Luckey went from hoping he could make enough money off his hobby to treat himself to a beer and a pizza, right through to selling Oculus for $2+ billion dollars in the space of exactly two years.
There are regular investment opportunities, but you need to keep your eyes open
Over the years, a tried and tested path for startup funding has emerged. Generally, startups will begin as bootstrapped companies working out of—at most—a co-working facility. But at this stage, while the startup is nothing more than an idea, investment opportunities don’t really present themselves. Unless you’re Mark’s mom or a friend of Elon, you probably won’t even hear about startups at this stage.
And besides, do you really want to drop your own money into some kids ‘disruptive idea’ without there being any proof of concept? If you’re family and friends, sure, it makes a great ‘passion project.’ But, unless the idea is truly mind-shatteringly good, it’s just another idea worth a few dollars at most.
However, if the founders have the execution to back up their ideas, they will emerge from the bootstrapped stage pretty quickly, and this is where things start to open up a little more. But, of course, there’s a reason why we often hear about funding rounds; these opportunities are time limited and not always easy to find.
Equity crowdfunding and venture capital
Once a startup gets some momentum, it’s going to be looking for more than what mom, pop, and a couple of well-heeled friends can stump up for. For many startups, the dream is to attract the attention of a well-known venture fund or a wealthy angel investor, then go on to become the next two-year unicorn.
But not all will attract venture funding for a variety of reasons. First and foremost, it’s a noisy marketplace where thousands of up-and-comers are competing for attention; even if they wanted to, most angel investors and funds simply don’t have the bandwidth to give serious consideration to all who warrant it. Then there’s also the issue of interests and/or philosophies not aligning between fund and startup, whether it be the startup isn’t interested in the investor’s approach to doing business, or vice versa.
So, for the rest of the otherwise promising startups who couldn’t attract the right venture capital for whatever reason, there’s the option of crowdfunding. This is where Oculus first turned to back in 2012. Of course, in this case, early backers were rewarded with discounted hardware rather than equity. Back then, equity crowdfunding wasn’t a real option in the states—the JOBS Act had only just been signed into law, meaning established equity crowdfunding platforms weren’t in place yet.
But this ecosystem has developed phenomenally over the years, with many mature platforms now hosting an array of projects. This has been hugely beneficial for many investors and startups. While many traditional angels and investors aren’t necessarily looking to participate in halal finance, for example, it’s a legitimate (and considerably large) market that many investors without a big public image are interested in. This is why Manzil, a halal neo-bank filling a large hole in the Canadian financial offering, turned to equity crowdfunding to continue growing its business.
Networks and public profiles have their limits;
Aside from the YCombinators of the world, many funds and investors will remain anonymous to startups that would otherwise be of great interest to them. And it goes without saying that the same applies in reverse; there are only so many investors a startup can attempt to reach out to whilst also having time to continue developing their product.
This is where startup events come in to play: structured events that introduce investors and startups to each other in the most efficient way possible. What otherwise entails months of appointment setting, screening, and other assorted rigamarole is stripped away, condensing the process of courting dozens of qualified prospects into just a few days.
Finding the right startup event
The first and most obvious options when it comes to startup events is attending something like TechCrunch Disrupt, or another supermassive event that tries to pack in everything and everyone. But these events come with the pitfalls of time-wasting for investors and startups looking to cut to the chase.
Aside from the tens of thousands of attendees that filter through events like Disrupt making it harder to stand out and be seen, there’s often plenty of distraction from what many investors and startups are really going for. When considerable amounts of attention are diverted to peripheral nuisances like Titstare and whatever else the inevitable attention seekers are up to, it can cut into the value of an event.
Boutique startup events like the Startup Supercup are perfect for serious investors and startups
For startups and investors looking to cut through the noise and make a maximum number of quality connections, boutique events tailored to maximize networking efficiency present the ideal option.
This is one of the reasons that the French incubator-accelerator Uniqorn set out to create the Startup Supercup event. By capping the event at 1000 participants and basing it in a smaller town away from the hustle and bustle of big cities, the idea is to offer an event where serious startups and investors are given the chance to properly network, free from the distractions of larger events and bigger cities.
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