From Silicon Dreams to Reality: A Beginner’s Handbook to Startup Investing

By Kraig Kleeman

Introduction

I’ve seen some things – from startups that skyrocketed beyond belief to ones that fizzled out before they even got off the ground—investing in startups. It’s not just a game; it’s an adventure. And I’m here to guide you through this thrilling, rollercoaster world of startup investments.

The U.S. Startup Scene: A Snapshot

Let’s start with a look at the current U.S. startup landscape. It’s bustling, diverse, and brimming with energy. There’s always a new idea around the corner and the pace. It never slows down. The market has ups and downs, but the dreamers and doers keep coming. What’s the vibe? Optimistic, but with a healthy dose of reality. Not every idea is gold, but the gold is there, waiting to be discovered.

Why Jump into Startup Investing?

Why should you consider throwing your hat in the startup investment ring? Let’s break it down:

Pros:

  • The thrill of the potential big win: There’s something exhilarating about being part of a startup’s journey from a mere idea to a household name.
  • Making a mark: Your investment could push a groundbreaking innovation out into the world. How cool is that?
  • Spice up your portfolio: Startups can add a dash of high-reward (albeit high-risk) flavor to your investment mix.

Cons:

  • Risky business: For every unicorn, many more don’t make it. Brace yourself for the possibility of loss.
  • Patience is key: Your money might be tied up longer than you’d like, with no easy way to cash out early.
  • Homework, homework, homework: Spotting a winner requires digging into details and understanding the market.

Where to Find the Next Big Thing

So, where do you find these potential gems? Platforms like AngelList, SeedInvest, and Crowdcube are my go-to. They’ve made it easier than ever to get a piece of the action, offering an array of startups. What sets them apart? Think of them as the gatekeepers, doing much of the initial vetting for you. Getting started is as easy as signing up, diving into their resources, and joining the conversation.

Spotting a Winner: Tips and Tricks

If you’re new to this, figuring out which startups have the “it” factor can feel like finding a needle in a haystack. Here’s what I look for:

  • A dynamite team: Great ideas are essential, but a capable team is crucial.
  • A product that solves a real problem: It’s all about offering a solution that people need.
  • Market potential: Is there a growing demand for what the startup offers?

And the red flags? Vague plans, regulatory nightmares, and a one-size-fits-all approach to the market are just a few.

Investing 101: The Erik Severinghaus Method

  1. Learn the ropes: There’s no substitute for knowledge. The more you know, the better your odds.
  2. Get connected: Talk to other investors, mingle with entrepreneurs, and soak up insights wherever you can.
  3. Pick wisely: Use what you’ve learned to sift through opportunities with a critical eye.
  4. Spread the love: Don’t put all your eggs in one basket. A little here, a little there, can spread out the risk.
  5. Keep tabs: Stay involved, ask questions, and track progress.

Tech Startups: Where the Magic Happens

I see a lot of magic happening in tech startups, in particular. AI, blockchain, green tech, health tech—these are the arenas where tomorrow’s leaders are being born. What’s the secret sauce? Innovation, scalability, and the ability to either shake up an existing market or create a new one.

Wrapping It Up

Jumping into startup investments can be one of the most exciting decisions ever. Sure, it’s not without its risks, but the rewards? They can be life-changing. It’s about more than just money; it’s about being part of something bigger than yourself, supporting the innovators who dare to dream big. And who knows? The startup you back today might just be the next big thing. Ready to leap? Let’s dive in together.

About Erik Severinghaus

Erik Severinghaus is a highly successful entrepreneur, author, and mountaineer. If his accomplishments and aspirations were to draw inspiration from natural icons, he could be described as a fusion of Mark Zuckerberg’s visionary approach to business and Tony Stark’s electrifying approach to saving humanity. He possesses keen business acumen and a flair for captivating customers, investors, and marketing partners.

Erik’s entrepreneurial spirit is boundless, as evidenced by his track record of founding, operating and exiting multiple ventures that have created a combined $600M in value. Erik’s investment skills are striking. He was a founding investor in Hyde Park Angels which recently helped ShipBob achieve unicorn status. He raised $6M startup capital for his newest venture, Bloomfilter, which is growing by triple digits, quarter over quarter.

As an endurance athlete, Erik has conquered some of the world’s tallest peaks, including Mt. Everest in 2018. In his public appearances, Erik is quick to discuss that learning to navigate through the valleys in his business life is what has led him to properly navigate the victories.