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Earnings on venture investments

Innovations and inventions are the most effective incentives that drive the economy of any country. “Most of its driving forces have recently been made up of quick or“ garage ”startups. These are companies that created without huge financial investments at the initial stage, so this is a great opportunity to earn or even hit the jackpot, ”say the creators of the media platform about making money on the Internet Ruscash .





Among the famous "garage" startups, Google, Twitter, Microsoft, Apple, Amazon are worth mentioning - these are only the most vivid and well-known among them. Each of these companies was created with the utmost enthusiasm, but after she saw the world, she won it and took its leading position.

Most financial analysts believe that the "dinosaurs" of the IT world can no longer hold the reins of government. Now at the helm are those who are ready to use creative, create new things and are not afraid of defeats. The desire to implement new, bold ideas comes along with venture capitalists - people who are willing to invest in very risky projects for a substantial profit in the future.
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As a separate type of business, venture investments appeared in the USA. At first, people willing to invest in such projects were called adventurers for a strong risk. But over time, attitudes toward venture investment began to change. Recently, such investors are on a par with ordinary entrepreneurs.

Among the first venture capital investors worth mentioning are the legendary people - Tom Perkins, Arthur Rock, Tommy Davis and Eugene Kleiner. Many supporters of this type of investment consider them pioneers. The experience, knowledge and financial contributions of these people were decisive in the development of the IT industry in the form in which we used to see it.

Venture fund - what is it?


In simple terms, a venture fund is a company that is willing to invest investor money and its own funds in an enterprise or project. To get venture capital investments, this project must be a start-up with a well-thought-out strategy.

The activities of this fund are always fraught with serious risks - more than 80% of all projects will never pay for themselves or bring any income even to its owner. But those 20% that start to work - pay off not only the money invested in them, but also the losses on other projects.

Such activity is not even familiar to most Russian organizations, because such funds appeared only recently in the CIS. On a par with them in the countries of the USA and Europe, especially in its western part, such funds gave a ticket to big business.

Venture fund is translated as risk. This is a company whose activities are connected with risky young organizations. This organization’s account accumulates funds that are spent on investing young startups in order to make a profit from it. The main criterion in choosing a startup for investments is the presence of possible profit in the short term and its success.

That is why eligible projects are chosen by highly qualified specialists - lawyers, economists and successful businessmen. When choosing, they are guided by the following principles:


Like many other types of businesses, the first venture fund was established and established in the United States.

The whole world learned about venture funds for the first time in the 80s of the last century, when the period of technical progress began at unprecedented rates. In parallel, constant unique developments were introduced into the field of electronics, which were supposed to improve the efficiency of many organizations. By 85, America had more than 650 companies that could provide young startups with investments.

Development of such projects was supported and stimulated by the government of the country, they provided assistance to such companies. By 87, venture companies reached their peak, the total capital of these organizations was more than $ 4 billion.

A large part of the business of these funds is investment in securities. But they are allowed by law to engage in more risky activities. Therefore, on a par with the purchase of securities, they are engaged in lending to organizations - buying bills of exchange and doing similar initiatives.

Now venture capital funds are funded mainly by companies with an average degree of risk.

Usually the amount of investment in one project is 1-5 million dollars.

In the Russian Federation, such funds are poorly developed when compared with the United States and Europe. Due to the insignificant investment experience, many companies do not agree to risk so much their own capital without having paper guarantees of a return or, especially, a return with a profit. But in recent years, such funds gradually began to appear and develop, giving good prospects for the development of such a business in this country.

Important venture funds:


How this capital struggles with emptiness


Venture funds are a major source of funding for the development of various innovations. According to analysts, over the past two decades, more than 10 billion dollars have been invested. There are startups that are ready to sponsor the state, there are those that have personal business sponsors or invest their own funds. And all the others are financed from venture funds.

Such funds occupy a serious void between government and business support on the one hand, and private infusions of finance on the other. Investing is often mixed when private and venture investments are made in one company.

What is the difference between venture investment:


How to invest


There are several ways to invest money in startups. This is an investment through crowdfunding sites, investor clubs or venture funds. You can create your own fund, but this requires huge capital.

There are a lot of thematic sites where anyone can become an investor in the project:


Having invested money through a cash investing platform, it can count on:


All revenues appear only if the process was successful, and the idea worked. If the funds were not collected in the right amount or the idea was not profitable, the investor does not receive anything. But the risk in this case is significantly higher than when investing through other investment methods.

Investor Clubs and Venture Funds


In the first case, the investor instructs the club to find a suitable project for investment, for which the club pays a small percentage of the commission. The benefit is that there is no need to independently calculate the profitability of the project - this is done by analysts and economists of the club who specialize only in these actions. Often the club invites such investors to co-invest - a great opportunity for a person to enter a good project, even with minimal investment.

The second option is more suitable for experienced investors. Most of the analytical work is performed by the employees of the fund itself - they estimate, calculate the level of risks, distribute startups according to the level of possible profitability. The investor himself receives only income less expenses and interest for managing his capital.

This investment option has a significant limitation - investments must be large, with a minimum capital it will not be possible to participate in a venture capital fund. The minimum investment amount is 500 thousand US dollars.

There is a second limitation - most of the funds prefer to work with proven entrepreneurs and investors. Therefore, it will be difficult for a newcomer to enter this market - it will be necessary to conduct many negotiations with the management of the funds before it becomes possible to invest in a worthwhile project.

Self play


You can create your own fund and not depend on the guidelines of investing funds. This method is associated with increased risk several times - it is difficult to calculate, to find suitable analysts and guaranteed profitable start-ups. But if successful, the profit of the investor will be many times higher than with participation in a foreign fund.

To create your own division and start investing, you need to not only explore the venture capital market. We will have to assemble a team of specialists in this field, rent an office and equipment for work, constantly carry out market analysis and research. It will be necessary not only to legalize everything correctly, but also to carry out promotions, to start production. To successfully become a foundation, you have to spend more than $ 8 million. However, the profit can reach the space sums with the right investments in successful projects.

For those to whom it seems too complicated and lengthy process, it is easier to follow the path of a businessman-patron. You just need to find a suitable project and invest in it. Each businessman has the right to choose the minimum amount of investments independently, as well as the level of involvement in the project of his ward.

How much can you earn


Successful startups, in which people have invested money, have become known throughout the world. This is the WhatsApp messenger, in which at the initial stage they invested about 250 thousand dollars, and at the moment the company's profit exceeded 16 billion US dollars. Social networks, especially Twitter, are often mentioned as successful projects. 5 million have been invested in Twitter; now its amount has exceeded 15 billion dollars.

It can be noted that venture capital investments can bring in tens and hundreds of times more investment. Despite serious risks, successful projects cover all possible expenses and give huge profits. According to the analytical company, each successful startup attracts up to 25 million, and after successful development, the profit reaches 200-250 million. The profit of each investor can reach 100-1000 percent.

In addition, the investor receives not only an excellent opportunity to earn a large amount, but also to become a real founder and sponsor of a new round in the development of any industry, especially in IT.

Source: https://habr.com/ru/post/246049/

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