"Despite a lot of negative publicity, startup investing can be rewarding financially. Startups, along with the influence of entrepreneurs, have contributed immeasurably to the development of this country.
Although picking a "winner" may not be easy, successful investing in startups could return yields of 5 to 100 times the initial investment. However, it is crucial to conduct the appropriate due diligence on the business, market, competitive landscape, and founding members to mitigate against risk.
At Facilitated Growth for instance, on a typical investment platform for startups, we simplify the due diligence process by only showcasing highly vetted companies. Each entrepreneur and their high level officers have to pass through background checks in order to even be considered, in addition to pitching the business venture to our investment committee, which is comprised of seasoned financial experts.
It is equally important to know what competition the startup has, what kind of competitive advantage the startup has in place, how they plan to become a profitable company, what they are doing with their money, and how the company is structured (directors, investors, advisors).
Basically, as a potential investor in a startup company, you should ask yourself if this business addresses a real concern or problem in the marketplace. If you do not see a real usage, you should definitely move on without hesitation. Never invest money that you cannot afford to lose."
Peter Tagliaferro is the director of investment strategy for Facilitated Growth, a New York based, full service management consultancy. For more than five years, he has expertly attained and managed the Firm's largest client accounts and directed a staff of junior consultants.
On a daily basis, Peter guides the investment decisions of Facilitated Growth clients by assessing their individual goals, future needs for capital, asset allocation, and risk guidelines.
Outside of his impressive 5th Avenue office, Peter enjoys music, fitness, and playing cards. He is an accomplished poker player with dozens of Hold'em wins throughout the country. In 2007, he finished 3rd in the 2007 CEO Poker Tour in Atlantic City.