Is A Start-up Worth Investing in?

With a start-up increase of a hundred and twenty percent since 2018, our nation has become a competitive whirlwind of innovation and trade. Now with over nine hundred UK start-ups, it can be difficult to determine which of those leading proposals have a promising future. Investing in a start-up can feel somewhat overwhelming with the selection of prosperous businesses at your fingertips, so it’s crucial to know what to look for.

For gauging which risk-free opportunities are likely to lead to long-term wealth, we have whittled down the top three qualities you should look for in your next investment.

Believe in the concept or product as much as the entrepreneurs do

It’s one thing wanting to find a business that suits your needs regarding the investment contracts, but it’s another matter making sure the business concept or product is appealing to you and is something you are also, to some degree passionate about. For example, if there is a topic, you’re ardent about, like animal rights, you may choose to invest in a skincare brand which shares the same ethos.

As well as having the belief in the business itself, you need to ensure the entrepreneurs that pitch the start-up to you are well informed about their specific industry and all the competitors. With this in mind you will know how invested the entrepreneurs are in understanding their target market and will help to be ahead of any trends if the deal goes through.

Ensure they have realistic expectations of their business growth

Whilst it’s always good be determined and have a clear direction in a business, it’s important that expectations of where the start-up will go are pragmatic so they can be achieved suitably. Focusing on the simplicities of the business, will result in a more secure foundation to build on over time and will, thus reveal a more reliable entrepreneur to work with.

Confirm it is a credible business

With regard to the pricing of the product or service, margins and costs, it’s necessary the entrepreneurs offer you a clear presentation of the projections with a logical financial plan. If the start-up owners have a transparent relationship with you, it will avoid any unnecessary mishaps along the way, and you  will know exactly how much you’re willing to invest from the get-go. A fundamental detail is to look for a gross margin of at least fifty percent and over.

‘Always wake up with a smile knowing that today you are going to have fun accomplishing what others are too afraid to do.’- Marc Cuban