How much money can I make on startup investments?

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Investing in early-stage startups can be extremely profitable. Returns of 100X-plus are seen somewhat regularly. In extreme cases, investors have made 2,000X their money or more.

Naturally, with such high reward comes high risk. Most young companies do not succeed, and many investments will be total losses. This is why it’s important to invest in multiple startups. In this market, outliers drive returns. To increase your chance of hitting one, invest in at least 15 to 20 companies.

Investing in 15-plus startups today isn’t as hard as it sounds. In fact, it’s simple compared to even four years ago. With the rise of online startup investing, you can put $1,000 to $5,000 in each opportunity. Prior to the online option, minimums typically ranged from $10,000 to $25,000. Access was far more difficult then, as well.

That’s one of the best things about this investment class today: the ease of diversification. It turns what is traditionally viewed as an extremely risky, high-cost investment into one where the risks are manageable and the required capital isn’t too high.

cremito Train Answered on September 7, 2015.
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