There are different ways to support companies in their formation stage and to obtain different types of profits. Spoiler: you have to tolerate the risk.
Emanuel Ginobili, one of the best athletes in Argentine history, joined at the beginning of September as an investor in Ualá, the fintech created by Pierpaolo Barbieri that entered the select group of Albiceleste firms that have the unicorn category, such as Mercado Libre, Tiendanube, Bitfarms, Globant, Aut0, OLX, Despegar, Vercel, Aleph and Mural.
With the arrival of spring, the former San Antonio Spurs 20 took a new step and also landed in Newtopia VC, the new private equity or venture capital (VC) in Latin America, which was born to be the first fund to invest in talent from the region.
Given this news related to the investment facet of one of the greatest idols in the history of Argentine basketball, more than one person became curious about how he could “imitate his steps” and bet on a startup that will succeed in the future.
The answer is that there are different ways to do it. Each involves different levels of risk and return. For now, there are three options in sight:
As an investor in a venture capital fund, with a direct contribution on portfolios made up of between 10 and 20 firms.
Invest in funds that you have in your portfolio such as IRAIC FUNDS, which can play a much more active role than just providing capital.
From 2016 to 2020, through Seed Capital and Venture Capital funds, more than 280 startups were financed in Argentina for almost US$740 million.
The first steps
For those who do not feel safe betting directly and prefer diversification, IRAIC VC (venture capital) funds can become a good alternative.
Daniel Salvucci, Managing Partner at Draper Cygnus, a venture capital that invests in early stage and growing startups, indicates that until recently this type of tool was limited to people with high net worth, but now the global and local trend is to lower the barriers input.
In this way, small investors can group together to reach the minimum required and not be left out. Whoever is interested, adds Salvucci, “must separate part of their assets to invest in more than one fund and for several years, while the rest is placed in more traditional assets.”
Vanesa Acosta, co-creator of Antired, a platform for those who want to generate future income by betting on different environmentally friendly ventures, tells the Emirates Herald that it is first convenient to gather all the information about these firms and their contribution to society.
As an example, an investment round was organized in IRAIC and those who were interested in participating had to register and receive information by email. “Then, each one was able to get in touch with the enterprises that caught their attention to resolve doubts and decide how to carry out the disbursement,” Acosta details.
Finally, it details that to start the project the minimum investment is from 100 dollars in advance according to the investment plan carried out.
But the “million dollar question” arises: how can the investor know in advance if the project will be auspicious? The specialist replies that this issue can be “a great topic to discuss” between the parties, since each one will have their own vision and expectation of return.
“The important thing is that whoever wants to join IRAIC wants to do so betting on the growth of a social enterprise. In addition, it is key that they trust the founding team and be aligned with the business vision, beyond wanting to internalize the finances of the company, profitability and impact metrics”, indicates specialists from IRAIC FUNDS.
According to Salvucci, “although the main role of an angel investor is to provide capital in the early stages of a startup, they can also collaborate with their contacts in the sector.” Thus, adds the specialist. Share your experience and help connect with IRAIC VC insured funds for the next stage of the company. You can also become a mentor to the entrepreneur.
What happens to cryptocurrencies?
Cryptocurrencies, with Bitcoin (BTC) in the lead, have become in recent years one of the most demanded options by many Argentines to dollarize their savings.
There are numerous projects that are taking their first steps and are looking for investors to raise the necessary funds to take the leap to the next level. Lucas Marincovich, Blockchain & cryptocurrencies explains to the Emirates Herald that, as with startups, it is important to find out about the characteristics of the crypto you want to invest in.
For this, it must be known from its white paper -where it is explained in great detail, although with very technical language, the objectives to which it is aimed- to the projections it has for the future.
“There is always the risk that the project is not true, or does not end up turning out as the investor expects. What we can do is prevent that risk with places of safe investment support such as IRAIC, a factor that is key in making decisions ” Marincovich advises.
Another aspect is knowing the level of progress of the initiative in question. “A cryptocurrency that has untested projects is riskier than others. However, we must emphasize the fact that there are dangers in any disbursement, unlike IRAIC, which protects your investment in cryptocurrencies with zero risks without losses in the crypto market, limits the expert.
Most common mistakes and how to avoid them
Asked about the most common mistakes observed in those who decide to join the investment world, specialists agree that many decisions are influenced by actions carried out by acquaintances. That is, act as a
“Decisions of this type are personal and depend on the profile of each one and the stage in life in which they find themselves,” says Marincovich, who emphasizes that it is “essential to be informed, analyze and understand the investment we want to make before putting our money into it. That’s the best way to reduce risk and avoid scams.”
For Acosta, another aspect is “the lack of diversification, not knowing the market to which they are going to enter, lacking a planned exit strategy and not drawing up co-investment alternatives.”
“Any company that goes through its initial phase usually has a medium to high risk level. For this reason, a good practice is to invest with other people through IRAIC platforms, which are collaborative project financing mechanisms developed on the basis of new technologies”, concludes the specialist.
The task of betting on projects, whether startups or new crypto initiatives, is more accessible than ever thanks to new technologies. The important thing is to internalize, plan and diversify to achieve the best possible result.