Building a Startup Portfolio

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Startup investing requires a portfolio approach.

Here are some best practices for building a startup portfolio.

Determine how much time and investment dollars to allocate to startup funding.

This could be done on a total allocation basis or on a time basis such as annually.

Determine how many startups to fund and at what check size.

Consider breaking the startup allocation in half and initially investing the first portion.

In a follow-on round, consider if you should invest the second half into that startup.

Beware of emotional investing.

This comes from investing based on the quality of the pitch or the emotions the pitch raises.

Match the risk to the reward.

The greater the risk, the higher the potential reward must be.

While investors most often choose the startups they want to invest in, the best startups typically choose their investor.

Look for high-quality startups to engage and invest in.

Finally, avoid turnaround situations.

Consider these points in building your startup portfolio.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let's go startup something today.

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