There are many great reasons to investing in early-stage companies:  the chance of profitable returns, the opportunity to 'give back' and to mentor budding entrepreneurs, exposure to new innovations, and a front-row seat to potentially transformative new businesses.

 

But amid the excitement and potential comes the knowledge that investing in start-ups is inherently risky.  Of course for many, that's part of the fun and the challenge - how to spot and nurture the most promising.

 

Experience teaches us that for every 10 start-ups, 5 or 6 will fail, 2 or 3 will just return your money or even just a fraction of it, and investors seek those 1 or 2 companies to see their profit. (add citation.)

 

So how can an individual increase her or his chances at obtaining the environmental and financial returns they seek?

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One way is join with other investors to evaluate early-stage opportunities.  Enter E8!

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In a room filled with smart, curious, passionate people who share a common goal, the fun is almost guaranteed.  

But how might E8 help reduce the risk?

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Common sense, backed by research from the Angel Resource Institute, shows that there are some key steps investors can take to increase their chance of a positive return.

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1.  Build a diversified portfolio.

2.  Conduct at least 20-40 hours of due diligence per investment.

3.  Invest in companies where they understand the market and/or the technology.

4.  Stay connected to the entrepreneur and the company after the investment.

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Details this research and its conclusions can be found in The 2016 Halo Report, which summarizes ........

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Still, knowing what you should do and finding the time and acquiring the knowledge to actually do it can be a daunting undertaking for an individual.   In particular, this might eliminate intriguing companies from consideration simply because they lie in a new and unfamiliar market.

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But when you evaluate companies and conduct due diligence in a group, you have access to the experience, skill set, and combined time of other investors. 

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