February 29, 2016
Capital can be difficult to come by, especially for a new startup. Fortunately, you can invest some of your money in a wide variety of ways with the intention of boosting your capital base. Following a smart approach can give your startup the boost it needs to get over a financial hurdle. In fact, using investments to build your capital base may soon be a much more viable option than turning to popular resources such as angel investors.
The Fall of Angel Funding and the Rise of Alternative Investments
Experts are predicting that angel investors are about to reduce their funding for startups. Additionally, crowdfunding and traditional bank loans can only get you so far. With this in mind, it makes sense to begin exploring investment opportunities with the intention of building your company’s capital. However, you need to arm yourself with a working knowledge of the various options before you move forward with any type of investment.
For example, simply picking a single stock and pouring your money into it is most likely not going to give you the type of fast return that may be necessary to get a startup off of the ground. This also negates the security of going with a long-term, small-yield approach that is guaranteed not to lose money. It is important to note that both of these options can be a good backbone for a long-term business venture, but you may not be able to acquire any notable capital funding from either of them for more than a year.
Due to this, it is best to look at shorter-term, larger yield possibilities such as binary options. For the uninitiated, binary options are one of the easiest and quickest ways to make investment money, but it is imperative to make smart choices. In a nutshell, you simply choose an option and decide whether or not it will finish above or below a specified point at a specific time. If you make a well-informed decision, you will earn investment capital. On the other hand, if you choose the wrong answer, you will earn nothing. Therefore, it is a good idea to turn to resources such as Banc De Binary for assistance and stock market related news and financial updates.
Longer Term Low Risk Options
As previously mentioned, traditional investment options such as stocks are better for long-term planning. You can also steer clear of the potential long-term complications of playing the stock market by choosing a more conservative approach. Certificates of Deposit may be one of the most low-yield producing ways to invest your company’s money, but they guarantee that you do not lose your money and will earn a small amount of interest over time. You may also wish to look into other similar opportunities, including Treasury Inflation Protected Securities, municipal bonds and money market funds.
Middle Risk Investments
Many people look purely at investments from a low and high risk perspective, but there is a third category: middle risk investments. These options vary in the length of time you must commit to them, and they give you the ability to earn a high yield return without taking on all of the potential negative factors that accompany a high risk investment.
Entrepreneurs who wish to generate a larger return than they can expect from a municipal bond or a Certificate of Deposit often turn to preferred stock, dividend paying stock and peer to peer lending. Doing this makes it possible to get a longer-term funding boost, but it is necessary to consider the risks versus the potential rewards before you move forward. Again, this approach requires a longer-term commitment than quick alternatives such as binary options.
Overall, the most vital thing for startup entrepreneurs to recognize is that lending options are in a state of flux. As a result, looking into alternative opportunities for growing your money is a good way to prevent future financial hiccups.
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