In today’s market, investing somewhere outside the reach of technology is all but impossible. Tech affects every aspect of other market segments, by making them more productive, more profitable, and increasing quality overall.
Not everyone is convinced that the tech sector (hardware, software, or internet) is the best place to invest, as there is a constant debate of risk vs. reward. Whether it’s
the memory of the dot-com stock bubble or the hopes of hitting an ROI jackpot such as Dropbox’s 39,000% return, there are a myriad of arguments both for and against investing in technology. In the end, it is hard to argue that technology is one of the biggest driving forces of today’s economy. With that being said, many tech startups have the opportunity to be the driving force behind tomorrow’s economy. Here are a few advantages to investing in a tech startup
Size of the Investment
Investing in a tech startup rather than established tech powerhouses like Apple or Google can be a good addition to your portfolio due to the opportunity to invest at the ground level. You can be one of few to own a sizeable share of equity in a startup for the same price as being one of the many with a sliver of an established tech company.
Opportunity to Diversify
Investing in tech startups provides the opportunity to diversify your portfolio and invest in tech simultaneously. Because tech is such a pervasive industry, it is possible to have multiple investments reliant on technology while still maintaining a diversified portfolio. This allows you to make investments in one or more startups in order to balance the amount of growth potential and risk in your portfolio.
Due Diligence on Tech
MicroVentures conducts due diligence on the companies for which it raises and provides information that you can use to assess the startup before you commit. Why? Due diligence, the comprehensive appraisal of a business undertaken by prospective buyers, is particularly important in technology wherein potential investors are less likely to grasp the implication of involved innovations. Better than relying on the information provided by the company, or leaving the investor to conduct research on their own, such diligence information helps to mitigate some risk and answer any questions an investor may have about the startup during the investing process.
Besides the diligence conducted by MicroVentures in each investment opportunity, after making an investment through MicroVentures, investors continue to receive quarterly reports on their company’s progress and have a clear channel of communication with the company through MicroVentures’ team.
As one of the biggest driving forces of today’s economy, there is little doubt that the rewards of investing in the technology sector are as great as the potential of tomorrow’s economy. But understanding technology requires trusted advisors who can help investors properly value and evaluate tech startups. We’re here to help.