First dates are like a roll of the dice:
Maybe you’ll have a blast (and even meet your mate)…
Or maybe the date will be a total write-off.
But here’s the thing:
If you can make it through a few dates with the same person, your odds of a relationship write-off keep going down…
And meanwhile, your odds of hitting the mate “jackpot” keep going up.
Today I’ll show you how to use this same strategy for investing in start-ups…
It can decrease your investment risk—and deliver big returns.
Follow-On Rounds
Most start-ups need several “rounds” of capital before they’re self-sufficient.
A company might raise a small “Friends & Family” round to build a prototype…
A “Seed” round to hire a few employees and do some marketing tests…
A “Venture” round to help the company really start to grow…
And over time, it might raise several additional rounds to prepare for an IPO. (Uber, for example, has already raised 14 rounds of funding.)
Generally speaking, as a start-up raises these “follow-on” rounds, it gets closer and closer to becoming a successful business.
So for investors like you, these later rounds can mean lower risk… and the potential for big profits.
Let me show you what I mean.
OurCrowd
OurCrowd is a mix between a venture capital fund and a crowdfunding portal.
Basically, after it identifies a promising start-up, OurCrowd invests in it from its own venture fund—and then offers us the chance to invest alongside it.
For example, in November of 2013, it offered a Seed investment in a “Big Data” company called Crosswise.
At the time, Crosswise was young and unproven, so its valuation was low—just $3.5 million. (“Valuation” is the same thing as Market Cap.)
But by January 2015, Crosswise was making significant progress. And it needed additional capital to support its growth.
As it was more mature now, and had a decreased risk profile, OurCrowd offered a “follow-on” Venture investment for Crosswise at an $11 million valuation.
Then, in April 2015, Oracle acquired Crosswise for $50 million.
In other words, if you’d invested in Crosswise in 2013 when it still had a relatively high risk of failure, you would have earned about 14 times your money.
But you also could have invested in 2015, when the company was far less risky—and in just three months, you would have made 4.5 times your money.
Not bad.
Follow-On Deals for All Investors
If you’re interested in seeing OurCrowd’s current deals, click here »
It just so happens that all of its current deals are follow-ons—from a Medical Device company called Surgical Theater, to another Big Data company called CrediFi.
Unfortunately, OurCrowd is only open to wealthy, accredited investors.
So unless you have a net worth of at least $1 million, or earn more than $200,000 a year, you can’t invest in any of OurCrowd’s deals.
But not to worry...
There are follow-on opportunities for unaccredited investors too.
For example, back in 2012, a funding platform called SeedInvest offered shares in WayBetter, a health and wellness app.
At the time, WayBetter had negligible revenues and was a high-risk investment.
But today, the company has grown to nearly $5 million in annual revenues, substantially lowering its risk profile.
So SeedInvest is offering a follow-on round for WayBetter…
And ALL investors can invest in this deal—regardless of their net worth or income.
If you’re interested in taking a look, click here »
Please note: Crowdability has no relationship with OurCrowd, SeedInvest, or with any of the start-ups mentioned in this article. Crowdability is an independent provider of education, information and research on start-ups and alternative investments.
Best Regards,
Founder
Crowdability.com
