Advice of David Azzato on Basics of Startup Investing to UK Entrepreneurs
A company that is new and less than ten years old is called a startup. A very successful company was a startup at some point. More entrepreneurs are joining the industry to build their financial strength and avoid working for other people. Due to this, innovation is encouraged to help build different companies that have high-end services. Creating a startup requires you to have the capital, which means you may have to involve investors in your business plan. Capital is a necessity for the company to grow with time. When you are a startup investor, you must provide capital and contribute ideas to make the company great.
David Azzato elaborated the difference between venture capitalists and angel investors while advising UK entrepreneurs. If you are an investor that uses personal savings to invest in startups, you can be called an angel investor. The angel investor is not restricted from making high-risk startup investments because they use personal savings. The capital given by angel investors is small, and they only fund one round.
Venture capitalists are the other option for startup investors. They get their capital from limited partners and tend to contribute more to an investment. Venture capitalist becomes part of the boards of the company they invest in, and they are the best for companies that require a large investment. Angel investors are the ideal starting point for startups being risky investments. Most startups fail, which is why angel investors are the go-to option for beginners in the market. Once the company has been established, venture capitalists and banks can contribute to additional funding to expand the company.
David Azzato explained to entrepreneurs how a startup investor makes investments. The investor provides money to a company to get an equity stake and being part of board members. The board seat allows investors to make an important decision, and the equity stakes boost their interest to guide the company so it can grow. The company valuation is done as the amount invested divided by the investor’s equity stake. When the company grows, and venture capitalists join its investment group, dilution has to occur where current shareholders give up some of their equity. Increasing valuation is the goal. You should know how to identify a good pitch from entrepreneurs with a good startup team as an investor using the advice of David Azzato. As an investor, startup investments are great to boost your wealth and help build a company using your skills. Read more: https://davidazzato.medium.com/