I have $50,000 that I want to invest in startups? Where do I start?
I want to begin using $50K of my savings to invest in other seed-stage startups. How do I get started?
What are some strategies for picking startups with the best odds of a positive ROI?
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Do you want to be involved or looking for a passive investment? Do you want to spend that money on 1-2 startups or diversify more and spread it around? Asking for starting point and options is different from asking for an investment advice, which is your 2nd question. – Webbie 10 years ago
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In addition to Lilia's questions, are you an accredited investor? i.e. Is your net worth at least $1M or make at least $200K a year? – Nishank Khanna 10 years ago
1 Answer
The adage in investment is that out of 10 investments, six of them will fail and return nothing, two or three may last long enough to break even and one might make some profit. The hope is that the one makes enough profit to cover the other nine and beyond.
If you've only got 50k to spend, you have to be prepared to lose it all.
At 50k you're better off buying a car - one of the fastest depreciating assets you can buy - because you know that even at 2 days old, it's still worth 50% of what you paid.
Assuming you're (able to be) accredited, you have three main paths:
Shotgun: Split the money into several small batches and help several startups exist for a short while, for a tiny percentage, and prepare to be diluted out of the mix.
All in: Find one team that you love, cross your fingers.
Collaborate: Put your money in with that of others to create a larger fund, which you hope will spread the risk but still return something.
