Sergey Kartashov tips on how to invest reasonably and not fail
Nov 26, 2021
iCrowdMarketing powered by iCrowdNewswire
Much effort is required to become a successful investor. And this road is not always smooth. Obstacles and pitfalls will surely come along the investor’s way. The motto “to get an immediate profit” in dynamic and unpredictable markets sounds too unrealistic. Many investors experience failed investments till they find their unicorns. Sergey Kartashov, the Senior Partner at technology company Roosh, comments on typical mistakes of new investors and gives helpful hints on how to avoid mistakes in choosing a startup for investing.
Kartashov notices that the investment market is going through changes though it is on the rise. It is possible to find more entrepreneurs and founders with another view to getting a profit. They are turning their directions into investing in ideas and long-term values. The investor gives statistical data to reveal that a small percentage of startups achieve triumph. $290 billion of funds was contributed to the riskiest venture capital investment in the first half of 2021. This amount exceeds twice compared as it was ten years ago. Almost every day, “novelties” of $1 billion investment show up on the market. Sergey Kartashov admits that among 900 such companies, only 300 of them reached a prestigious status this year.
Tips on investing successfully
Fewer startups are capable of achieving prosperity, successful promotion, or reaching an opportunity to pay off. The Roosh partner highlights the importance of conducting a thorough analysis of a startup before investing in it. Therefore, funding a project without understanding the market is mistake number one. Instead, Sergey Kartashov recommends overseeing if global giants like Andreessen Horowitz or Sequoia Capital assist such a deal. According to PwC, only one project out of ten was successful in 2017, and the trend has not changed in four years.
The process of selecting a worthy investee is time-consuming and responsible. Unfortunately, new investors usually focus on seeking talented employees and ignore other important aspects. For instance, they can omit the value of making up a competitive business plan. Sergey lists some failures new investors can encounter: forgetting business rules, focusing exclusively on high-tech development, lacking team-building skills. Sergey Kartashov emphasizes that a full-fledged company should delegate authority and motivate people.
Another mistake involves neglecting the legal side of the business. This question is crucial in partnering the founder and the investor. There are many risks here, though. As the investor comments, this part of the deal requires a committed attitude of the startup’s team. It should dive into the legal intricacies of its industry and be ready to overcome a crisis. Titanovo, a Ukrainian startup that conducts DNA analysis, is an example. When it obtained assistance from an American competitor, its sales were about $1 million. But with the forced project closure, the company founder wrote, “the torpedo of a lawsuit sank” his brainchild. And the investors went down together with the founder. It should be kept in mind.
In conclusion, Sergey Kartashov gives some tips to young IT investors. First, they should select a high-quality and trustworthy team with good organizational, legal, and business skills. Also, they should focus on their expertise and choose the industry they are aware of well.
Tags: English