Four Ways Angel Investors Can Make A Profit When Investing In A Startup

All Hong Kong startups consider the four possibilities from the perspective of investors.

Sell the startup to another company.

There are always largercorporatewould typically consider buying startups that are in their own industry or that are doing working which is complementary to their core business. From a technology improvement point of view, larger corporate would look for startups who would be able to provide a shot of ingenuity with a side of technology for their existing businesses. An example is for some small countries withovera few hundred companies get acquired each year by larger multinationals. From the perspective of an angel investor, this is the fastestroute to make money on his/her original investment. When a startup is bought out, an angel investor would usually receive cash, or new stock, or a combination of the two from the acquiring company.

Help the startup go public.

This scenario happens less often in startups because in truth many startups would not have survived through the first year or first few years. Because of this, many startups would never make it to the stage where they can bequalified for many rounds of major investment.Simply said, the startup needs to first go through much struggle and/or many stages in user/customer growth before they can acquire and maintain sufficient amount of loyal users/customers. These customers also need to be able to eventually provide the startup (or the business) with consistent and more than plenty revenue. But when a startup is able to make it through all the stages, it is in a golden era. The opportunities that follow is unlimited. You would see the business starting to consider some globally recognized stock markets with their IPO like London Stock Exchange, New York Stock Exchange (NYSE),NASDAQ, or Hang Seng Index.

Grow the startup larger and get paid dividends.

There are companies who would decide not to get bought or IPO. The vision behind the founders and co-founders are usually running large and standalone businesses for many years while the business would be financial suffice. Founders may pay out part of their cash flow in the form of ongoing dividends to investors. When the cash buildup is large enough on the balance sheet, founders may pay a large sum of one-time special dividend.

Sell a share (or part of the startup) to someone else.

Usually investors in startups would be eligibleto sell their shares to another buyer for a profit.

Leverage Invest Hong Kong to grow business.

Invest Hong Kong (or InvestHK) is an organization with objectives to support Hong Kong startups (and//or business) to grow in terms of planning, setup, launch, and expansion. A good advice for HK startup founders is to for them to get to know how exactly InvestHK can help them grow in all areas. Founders may be able to find suitable investors through the organization to invest in their startups.