Com­ment: Si­mon Slade

Comms MEA - - Contents - By Si­mon Slade

In­vest­ing in star­tups is a win-win for busi­nesses look­ing to both ex­pand and es­tab­lish them­selves

as in­dus­try lead­ers.

In­vest­ing in star­tups is a win-win for busi­nesses – in­clud­ing tel­cos – look­ing to both ex­pand and es­tab­lish them­selves as in­dus­try lead­ers.

As their own busi­nesses thrive and grow, en­trepreneurs have a unique op­por­tu­nity to in­vest in other star­tups in their field or even in a com­pletely new in­dus­try. This type of in­vest­ment can be a hugely valu­able ex­pe­ri­ence that pro­vides ex­po­sure and net­work­ing op­por­tu­ni­ties, not to men­tion the po­ten­tial re­turn on in­vest­ment.

As with any in­vest­ment, tim­ing is ev­ery­thing. Early prof­its should go back into grow­ing your busi­ness, but once you have some sta­bil­ity, it’s time to di­ver­sify. Here’s why en­trepreneurs in all in­dus­tries should con­sider in­vest­ing in other star­tups.

En­trepreneurs have a unique abil­ity to as­sess risk

You’ve done this be­fore. Once you’ve brought a busi­ness idea to fruition, you in­ti­mately un­der­stand the process and de­tail that go into mak­ing a ven­ture

In­vest­ing in star­tups can pay div­i­dends for even large com­pa­nies,

says Si­mon Slade.

suc­cess­ful. This al­lows you to as­sess the risk of your in­vest­ment with greater-than-av­er­age knowl­edge. Even out­side of your in­dus­try, your busi­ness acu­men as an en­tre­pre­neur will aid you in mak­ing smart in­vest­ment de­ci­sions about which star­tups to sup­port.

In­vest­ing in star­tups keeps you up­dated

When you are work­ing with fresh, new busi­nesses, you stay fresh and up to date. In­vest­ing in a startup al­lows you to get in­volved with cut­ting-edge trends and learn from younger, more green en­trepreneurs. These peo­ple and their busi­nesses have a lot to of­fer you in the way of con­tin­u­ing ed­u­ca­tion and con­sumer aware­ness. New busi­nesses are an­swer­ing new de­mands, ones you might not even be aware of yet. By stay­ing in­volved with the star­tups, you stay more con­nected to con­sumers and what they re­ally want—some­thing that changes ev­ery minute.

Per­haps nowhere is this rapid change more ap­par­ent than in the telecom­mu­ni­ca­tions and tech in­dus­tries. While it’s smart to in­vest out­side of your in­dus­try as much as pos­si­ble, tech en­trepreneurs have so much to gain from in­vest­ing in star­tups within their in­dus­try. A stream­lined con­nec­tion to the new­est and fresh­est ideas in the tech world is a ma­jor ad­van­tage for any es­tab­lished busi­ness. It’s easy to be­come ir­rel­e­vant in such a rapidly chang­ing in­dus­try, and in­vest­ing in early-stage busi­nesses makes that far less likely.

When the owner of a soft­ware com­pany in Amer­ica in­vests in a telecom­mu­ni­ca­tions startup in Nairobi, she not only gets a new au­di­ence by branch­ing out of her in­dus­try, but she also gets a new au­di­ence ge­o­graph­i­cally. While a com­pany might have de­cent lo­cal or even na­tional aware­ness, branch­ing out via investments can pro­vide in­ter­na­tional recog­ni­tion.”

Si­mon Slade

In­vest­ing in a startup can im­prove life for you and your team

Part of the rea­son I was ea­ger to in­vest in Swift Med, a vir­tual GP clinic, was be­cause I could di­rectly see the ben­e­fits of this busi­ness on a per­sonal level. The con­ve­nience of a vir­tual doc­tor’s visit is un­beat­able, es­pe­cially for peo­ple with busy sched­ules and lots of de­mands on their time. I’d rather spend an hour with my kid than an hour wait­ing in a doc­tor’s of­fice, and Swift Med makes that pos­si­ble.

Your in­vest­ment in a startup can ul­ti­mately have an ROI that ap­pears as more than just dol­lars. In­vest­ment can sup­port a busi­ness that ul­ti­mately makes life bet­ter for you and your em­ploy­ees.

Net­work ex­pan­sion

In­vest­ing in a new busi­ness is per­haps the ul­ti­mate net­work­ing ac­tiv­ity. When you dis­cover a small, in­no­va­tive com­pany that in­spires you, you’re go­ing to meet the peo­ple as­so­ci­ated with that com­pany. These peo­ple tend be ex­cel­lent con­nec­tions that can pro­vide fruit­ful growth. They might be fu­ture cus­tomers or clients for your ex­ist­ing busi­ness, or even fu­ture busi­ness part­ners for a new ven­ture. Even if you never for­mally work with any of these new mem­bers of your net­work, they can pro­vide you with in­spi­ra­tion, ad­vice and re­sources that will make you a bet­ter en­tre­pre­neur.

Ex­po­sure for your busi­ness (es)

In­vest­ing in a startup can also be seen as a mar­ket­ing move for your ex­ist­ing com­pany or com­pa­nies. By ex­pand­ing your net­work as an en­tre­pre­neur­ial in­vestor, you get your name –and the name of your com­pany – in front of a broader au­di­ence.

When the owner of a soft­ware com­pany in Amer­ica in­vests in a telecom­mu­ni­ca­tions startup in Nairobi, she not only gets a new au­di­ence by branch­ing out of her in­dus­try, but she also gets a new au­di­ence ge­o­graph­i­cally. While a com­pany might have de­cent lo­cal or even na­tional aware­ness, branch­ing out via investments can pro­vide in­ter­na­tional recog­ni­tion.

Be smart

I’m not ad­vis­ing en­trepreneurs to sim­ply in­vest. I’m an advocate of in­tel­li­gent in­vest­ment, in which you care­fully con­sider risk, build a re­la­tion­ship with the busi­ness owner, and par­tic­i­pate in pro­tect­ing your in­vest­ment once you’ve made it. In­vest­ing is an ac­tive process – not sim­ply throw­ing money at the wall and hop­ing it sticks.

About the au­thorSi­mon Slade, CEO and co-founder of Af­filo­rama, an af­fil­i­ate mar­ket­ing train­ing com­mu­nity; SaleHoo, an on­line drop­ship and whole­sale direc­tory; co-founder of Smt­p2Go, an email de­liv­ery ser­vice and in­vestor in SwiftMed, a vir­tual GP clinic.

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