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How Can I Invest in Startups?

Posted by Erica Duignan Minnihan on May 1, 2016 3:52:00 PM


 

 

There are several avenues to building an early stage portfolio. One is to invest with a fund manager, who will select the investments for you. These managers provide the service of selecting and vetting the companies in your portfolio, and in exchange they typically take a 2% annual management fee, as well as 20% of any gains realized on your portfolio.

If you want to avoid the fees, carry and capital commitments that come with fund investing, direct investing is an option. This is when you directly own the equity in the startup, rather than the fund manager owning it on your behalf. Many people enjoy making direct investments in startups for several reasons:

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Topics: Venture Investing, Invest in Startups, Portfolio Building, Direct Investment