3 ms·

Fell in love with a product/start-up, want to invest in it

7 points by lezginka 16y ago

The other day I signed up for a product offered by a small start-up. I fell in love with the product that does everything I need and more and the company itself. I looked up the company and noticed they got about $200k of financing from various venture groups (mostly small ones). I would like to approach the founder and invest about 50K. I've never done this before. What do I ask in return? How to I approach the founder? What do I say so I dont turn him off? Any pointers will be appreciated.

jeffepp 16y ago
Startups get approached all the time (ones with traction & articles written about them) so simply tell the founder you love the company and would like to invest. If he has raised money he will not be turned off by your approach. Your best bet is to join in a round (if it is open) otherwise, it may not be feasible given the other investors and legal issues involved.
calbear81 16y ago
If it's a great product with lots of potential, the startup may already have an oversubscribed round so you'll have to pitch them on why you should be allowed in. It's best if you can bring something other than $50k to the table since a startup is always looking for someone who can provide either mentoring, connections, and help with other aspects of their strategy.
staunch 16y ago
One thing to be aware of is that they can't safely take your money unless you're an accredited investor. Hopefully you meet the requirements or you wouldn't put 50k down but FYI. http://www.sec.gov/answers/accred.htm http://www.sec.gov/answers/accred.htm
- lezginka 16y ago
  Thank you. I just checked, looks like I fall in one of the categories listed. Never knew I am an accredited investor :)
Sloven 16y ago
First of all you should to analize theirs finance situation. If you don't know how, then invest smal part of money. And then, if all goes well, you could to increase the value. Otherwise you just lose your money.
thewordpainter 16y ago
Also consider how much you'd be willing to invest overall. if they took off, you want to make sure you can maintain your stake. it's probably better to start with a more conservative position, and leave yourself room to re-up.

7 points by lezginka 16y ago

jeffepp 16y ago

Startups get approached all the time (ones with traction & articles written about them) so simply tell the founder you love the company and would like to invest. If he has raised money he will not be turned off by your approach. Your best bet is to join in a round (if it is open) otherwise, it may not be feasible given the other investors and legal issues involved.

calbear81 16y ago

If it's a great product with lots of potential, the startup may already have an oversubscribed round so you'll have to pitch them on why you should be allowed in. It's best if you can bring something other than $50k to the table since a startup is always looking for someone who can provide either mentoring, connections, and help with other aspects of their strategy.

staunch 16y ago

One thing to be aware of is that they can't safely take your money unless you're an accredited investor. Hopefully you meet the requirements or you wouldn't put 50k down but FYI. http://www.sec.gov/answers/accred.htm http://www.sec.gov/answers/accred.htm

lezginka 16y ago
Thank you. I just checked, looks like I fall in one of the categories listed. Never knew I am an accredited investor :)

Sloven 16y ago

First of all you should to analize theirs finance situation. If you don't know how, then invest smal part of money. And then, if all goes well, you could to increase the value. Otherwise you just lose your money.

thewordpainter 16y ago

Also consider how much you'd be willing to invest overall. if they took off, you want to make sure you can maintain your stake. it's probably better to start with a more conservative position, and leave yourself room to re-up.