Supporting a new local start-up company by investing in them is a great way of getting involved in the local economy and hopefully making a smart investment at the same time. What is the best way to put your money into a start-up in Swindon that is likely to succeed?
Find an Idea That You Think Will Work
The first step is arguably the most difficult, as you need to discover which of the latest start-ups in the area appear to have the best chance of success. Close to 700,000 start-ups spring up every year in the UK but over half of them no longer exist just five years later.
Finding the right idea means looking for something that you believe in and can see a bright future for. Among the latest Swindon start-ups, we can see Traced, which produces a mobile app designed to protect mobile phone users from security breaches.
New ideas appear all the time, but they aren’t always publicly available. Look out for new stories about interesting new ventures or fund-raising schemes on sites like Kickstarter, where you can get in early if you are impressed by their plans.
Gauge the Market
No matter how good a business idea is, it will only be a success if the current situation in the market is right for it. Finding this out means doing a lot of research, to see what rivals they are up against, and whether there are any similar ideas out there that could restrict their chances of gaining a good market share.
Using financial market tools could be an interesting approach to finding out what you need to know. An example of how this works can be found with the CrowdFeed™ tool from Trade360. This provides a live-sentiment indicator that allows you to see the current market view of an asset, which could help you to better understand the sector.
The more you understand the market the better, which is why it makes sense to look at start-ups involved in areas that you have experience with. If you know the type of business, then you will have a clearer idea of the potential of the new company.
Look at How You Can Play a Part
There are various ways that you can invest in a start-up and hope to play a part in its eventual success. As we have seen, one approach is to join in with their crowd-funding phase, which lets you get involved at a very early stage, usually before their product or service is even up and running.
You may also get the chance to invest in the initial public offering (IPO), which is when a company is first floated on the stock exchange. This is often done when a company has been successful and wants to raise more funding to expand or to take over a rival.
Any of the approaches that we have looked at can be useful in giving you a smart way of investing in a new Swindon business that is going places.