Oct 30, 2021
We’re taking the journey into the brave new world of startups and startup investing, continuing the conversation with successful startup founder, tech startup investor and Shark Tank star Steve Baxter.
Last week we delved into the entrepreneurial world as we followed Steve’s own journey to startup success and what it takes to be a successful entrepreneur.
This week we take this to the next level to consider what makes a successful startup and how you can go about evaluating and investing in them.
According to recent research, the failure rate for a venture fund portfolio is 40% to 50% in a given year, and 90% of all companies invested in will not make it beyond the 10 year mark. So the notion that only one in 10 venture capital investments will succeed is industry expectation. But the 10% of companies that do make it big can return many thousands of percent to investors.
Understandably, typical venture deals are structured over 10 years until exit. The ideal exit strategy is for the company to go public via an initial public offering (IPO), which can generate the out-sized returns expected from taking on such risk. Other exit strategies that are less desirable include being acquired by another company or remaining as a private, profitable venture.
So as an investment class, startups are an area of big risks with the slim probability of big rewards.
So how can investors be successful at the startup game? This is where Steve Baxter comes in.
As you already know if you listened to last episode’s part 1 chat, Steve became a celebrity startup investor as a Shark on the popular TV Show Shark Tank following his personal startup founder success with PIPE Networks, which was acquired for a whopping $373 million.
Steve now runs TEN13, an investment syndicate platform for sophisticated investors to invest alongside him and the experienced Transition Level Investments team. Unlike many venture capitalists, Steve puts his own cash on the dash to the tune of an average of 15% to 20% of every seed deal.
Enjoy startup investing insights from one of the best in the business.
Steve's book recommendation:
Ruins Of The Earth by Hopper and Chaney
So If you’re a sophisticated investor looking to diversify your portfolio and invest in top calibre technology companies, reach out to Steve and his high calibre TEN13 investment team who undertake exhaustive due diligence before they invest.
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