| Hi Taylor:
Any tips for someone interested in venture capitalism? I've just sold
my own business for a decent amount and want to get back in the game
without overextending myself, but I'm not exactly sure where to start.
Hi Elizabeth: Seems like you're in a great position to test
the waters of venture capital. This investing can be hard when you're
too wrapped up in your own endeavors, so giving yourself time to think
things through will always serve you well. Here are three points to
consider before getting started:
about how much you want to invest. You need to start here
or else you might get sucked into something that puts you underwater
in a hurry. Just like deciding how much car or house you can afford
before talking to a dealer or realtor, don't get into business
investing without first figuring out what you're willing to offer
as a financier. You can decide on a smaller amount that lets you
spread your wealth between different companies, or the largest
percentage of your liquid capital that can go to one startup.
With no shortage of business owners looking for financial backing,
establishing a price before you start searching will help you
narrow the field.
2. Think about the means. You have plenty of options for
how you get your money to a business owner in need. I handle this
service on behalf of my clients, as do many wealth managers. You
can go directly to an entrepreneur and draw up your own contract
if you feel comfortable doing it that way. If you want to have
a lot of safety mechanisms in place, try LendingClub or one of
the other P2P sites that allows you to join forces with other
venture capitalists to fund small businesses. You'll learn a lot
during your first trial with business funding, so focus on safety
and security at the outset. If you're comfortable, you may increase
your risk and revenue as you become more comfortable with the
3. Think of who you want to back. What kind of businesses
and business owners are you interested in? The whole process is
much more rewarding when you care about where your money is going.
Depending on what your company did, you may be able to offer expertise
in addition to funding for a small business owner in need. When
you pick the right venture, business investing is a lot of fun.
| It sounds like
you're in a good position for this financial step, so the trick is
just finding the right avenue, the right company, and the right amount
to give. Best of luck!
© Taylor Kovar
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before implementing any strategy discussed herein. To submit a question
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