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Got cash? Invest in a 'start-up'!

Did you know that in the first 6 months of 2015, Indian startups have raised $3.5 Bn ? Almost every other day a new startup idea is funded. The sheer numbers, the ideas and innovations will blow your mind away! Interestingly, as I read through the list of funded startups, I recognized that they were all pointed solutions to a specific customer need / problem area and as relevant to the Indian context.Bottom-line, no dearth of problems and no dearth of solutions!

Several weeks ago I came across another interesting article which highlighted that Top global banks have ear-marked 100Mn$ each to invest in start-ups. The article piqued my interest simply because a bank is in the business of protecting and compounding its own money and the money of its customers. To meet its business objectives, most banks invest in diverse financial instruments to manage their risks and to ensure that they meet their financial obligations. So it seemed interesting when a bank itself was putting its money in a start-up! – not as a loan, but as an investor. That really was an indication of something more significant.

Interestingly I’ve also read news of Indian companies investing in start-ups. And so are business leaders . Whether it is purely a financial investment or a business decision to diversify the business portfolio or an eagerness to be a part of the next big game-changer – I can’t say for sure!

Also not to mention, high net-worth individuals are also funding start-ups. From Bollywood, there are umpteen examples of movie stars who have invested in new start-ups.

It appears that investing in start-ups is soon emerging to be a serious investment option – from banks to corporates to (groups of) individual investors. By simple logic, if you have cash and have already made investments in real-estate, shares, other financial instruments, gold and possibly your own enterprise too, what can you do with any residual cash that you have? Invest in a start-up stands out as a good option – given that India is now a fertile ground for ideas and innovation, and being an entrepreneur is cool!

On the other hand, ever since I have been active on LinkedIn over the past few months, I’ve observed a lot of individuals in my professional networks have updated their profile to read as “VC [Venture Capitalist] / Mentor to Start-ups”.

So two things emerge strongly. One, the start-up industry has never been more vibrant – with ideas, big dreams, willingness to tread the uncharted waters early in life, a quest to be part the next BIG things. Two, everyone is keen to be an investor in start-ups. So even if you don’t have the next big idea or experience or inclination to start your own venture, you can play a part in the start-up community by funding them! After all, money power speaks many languages… Right?

So what is the new age mantra for those who have some extra cash? | Invest in a start-up.

Do you agree? Leave a comment to let me know..

Note: A version of this post also appeared here

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