How to Invest in a New Start-Up Business

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Invest in a new start-up business by researching the company, reading the business plan, checking out the competition and cheerleading for the business. Stay ahead of fellow investors by looking for new business opportunities with help from a financial consultant in this free video on business financing.

Part of the Video Series: Business Financing
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Video Transcript

My name is Bill Rae. I'm with Alumni Financial Services. I've been in the finance and the business world for well over 20 years, and today's topic is how to invest in a start-up business. Well, as in any venture, the first thing you need to do is get comfortable with what it is that you're looking at. What I would recommend is narrow your field down. Decide what it is that really excites you, and then go and take a look around your local area. Attend as many conferences on that particular product or service as you can. Get a real feel for it. Then what you want to do is if the start-up capital person approaches you, make sure that they have a business plan. It's your right -- ask for it. Make sure you read it, you can understand it, and is it feasible? Is it thought out, okay? Then, what you want to make sure you do is take a look around and say, "What's the competition?" In other words, if I put my money into this business, what's the chance of this thing succeeding, and will I get my money back? That's important. Once you're comfortable with all those things and you're comfortable with the principles behind the plan, and you feel that it's going to happen, then I would suggest you become a cheerleader for that company once you invest. So you really want to balance your desire and your input for information with the potential return. Don't oversell yourself, but once you have jumped on board, make sure you become the biggest cheerleader there is until that venture becomes successful. Stay ahead of your fellow investors by watching down the road. What's the next big thing coming down? Is it going to impact my company? Is it going to impact my investment? That's my advice. And as always, I suggest make sure you understand what it is you're signing. Seek outside counsel and good, sound advisers. My name is Bill Rae, I'm with Alumni Financial, and we're helping you build wealth.

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