Yes, there are ways for individual investors to invest in startups.
You can invest directly at an early stage (generally at a pre-seed / seed stage - people often end up putting amounts as low as 2-3L in a startup at the early stages). Beyond this, generally the amount of funding required by the co increases, and they would want more professional / institutional investors on the shareholder roster).
However, this is obviously a difficult proposition since - it is difficult to generate good deal flow as a retail investor + there would be a high risk since your investment would be in a few startups only.
To counter this, companies like Angel List have come up with syndicates.
Syndicate refers to a group of people coming together and investing in a bunch of startups, with 1/2 folks taking the lead who are responsible for generating the deal flow, due diligence etc. Think of it as a fund only in principle, but the structuring is different.
The only problem is that you need to be an accredited investor (net worth of 2Cr or more excluding primary residence and some other requirements).
As far as I know, there is no way for retail investors to become an LP in venture capital funds or buyout funds - their check sizes are generally large.
Love the analysis Arpit!
Is there a way for individual investors to invest in buyouts or VC funding?
Hi Anuja. Thanks a lot for reading :)
Yes, there are ways for individual investors to invest in startups.
You can invest directly at an early stage (generally at a pre-seed / seed stage - people often end up putting amounts as low as 2-3L in a startup at the early stages). Beyond this, generally the amount of funding required by the co increases, and they would want more professional / institutional investors on the shareholder roster).
However, this is obviously a difficult proposition since - it is difficult to generate good deal flow as a retail investor + there would be a high risk since your investment would be in a few startups only.
To counter this, companies like Angel List have come up with syndicates.
https://angel.co/syndicates/for-investors#syndicates
Syndicate refers to a group of people coming together and investing in a bunch of startups, with 1/2 folks taking the lead who are responsible for generating the deal flow, due diligence etc. Think of it as a fund only in principle, but the structuring is different.
The only problem is that you need to be an accredited investor (net worth of 2Cr or more excluding primary residence and some other requirements).
As far as I know, there is no way for retail investors to become an LP in venture capital funds or buyout funds - their check sizes are generally large.