How to Become a Venture Capitalist

When the average individual hears the words “venture capitalist,” they usually imagine a wealthy person who rakes in millions of dollars from lucrative investments. While the attainment of wealth is certainly an aspect of a venture capitalist’s achievements, there are many other factors involved in the process.

Many people who aspire to become venture capitalists do so with the intention of garnering high funds in a relatively short time period. However, this is not how the game is played. Venture capitalism is, by no means, a get-rich-quick scheme. Like any other financial endeavor, this occupation requires time, skill, knowledge, and sound judgment.

Hence, those who are still interested in becoming venture capitalists will surely benefit from following the forthcoming steps.

Sharpen Your Business Skills

Many people are under the illusion that the sole job of venture capitalists is making wise and lucrative investments. However, Sales Force explains that requirements for successful venture capitalists extend way beyond making investments and letting the funds roll in.

Any individual who is serious about this line of work must also be proficient in areas such as networking, investigating, analyzing business markets, and working with entrepreneurs. In this business, having the right contacts and professional skills makes all the difference in the world.

Gain Professional Experience

The majority of prosperous venture capitalists usually work their way up to this profession. Thankfully, there are a variety of career paths and occupations which aspiring venture capitalists can partake in. Starting a (small) business, working as an assistant/banker, or even becoming an angel investor (assuming that the necessary funds are available), etc can be especially beneficial career paths for people who are serious about becoming venture capitalists.

However, acquiring the knowledge and skill sets for this line of work does not occur overnight; as a matter of fact, years, or even decades, could pass before an individual is truly ready to enter the world of venture capitalism. There is nothing wrong with this, seeing as each person is on their own unique journey.

Finally, all venture capitalists should maintain upstanding reputations, real-life experience, and passion for the products which they choose to invest in.

Seek Mentors

While business skills and professional experience are formidable assets in the world of venture capitalism, the opportunity to connect with a mentor in this particular line of work is unbeatable, as stated by Chron. Not only have mentors been where aspiring venture capitalists are going, but they also have savvy investing skills and information which will prove to be invaluable.

 

Authored by Gabrielle Renee Seunagal

How to Become an Angel Investor

Angel investors are usually wealthy individuals who invest in startup companies and entrepreneurs. The aforementioned investments usually come with the expectation that the “angel” will receive his or her money back (and then some) as the company takes off. In some cases, the investments occur simply one time; in other situations, the “angel” may make repeated investments.

Investing is one of the most common ways for people to capitalize upon their wealth, thus earning more of it. However, there are usually certain stipulations and requirements for individuals who wish to become angel investors.

Secure the Proper Resources

Contrary to popular belief, becoming an angel investor is more complex than simply throwing large sums of money at businesses which are likely to succeed later on down the line. According to Investopedia, angel investors are required to have a net worth of at least one million dollars, notable assets, a minimal yearly income of $200,000, considerable, professional investing experience, and liberal amounts of time.

Another critical skill for angel investors is good judgment. Many entrepreneurs have ideas and ambitions, but a plan for execution is paramount. Learning about the background, vision, experience, and finances of the company founders will provide insight into whether or not an angel investor can expect to yield profit from their initial investment.

Be Willing to Take Calculated Risks

Approximately 50% of startup companies go out of business within the first few years of their inception. For this reason, angel investors should carefully consider which enterprises they want to put their money into. Moreover, “angels” should not invest money which they need for other purposes, such as retirement, savings, etc.

Patience is yet another virtue for any successful angel investor. In many cases, it takes years for angel investors to see a return on the funds they put into certain companies. Hence, individuals who expect to see immediate gains and profits should steer clear of angel investing.

A Final Word

One of the most critical things to remember about angel investing is the fact that there are no guarantees. While one “angel” puts hundreds of thousands of dollars into a company and regains millions over time, another “angel” could invest just as much money only to lose it all to an enterprise which ultimately fails. At the end of the day, this form of investing all comes down to evaluating the business and ultimately deciding whether or not making a particular investment is worth the capital.

 

Authored by Gabrielle Renee Seunagal

How to Avoid Financial Scams

Financial scams are more prevalent than ever in today’s world. With the rise of the internet and other forms of technology, dishonest people are getting more and more crafty in their maneuvers to steal money from hardworking, unsuspecting individuals. For this reason, awareness of red flags and warning signs has never been more imperative.

Unfortunately, there are many individuals who have fallen victim to certain scams and fraudsters who were only after their money. The only bright side to this reality is the fact that other people can learn from them. Therefore, knowing what to be aware of, what not to click on, and who not to share personal information with can save hundreds, if not thousands, of dollars.

Know the Basics

Although the specifics of scams vary from fraudster to fraudster, they usually fall into certain basic categories. U.S. News explains that the majority of financial scams pertain to at least one of the following issues:

  • IRS
  • Taxes
  • Investing
  • Credit cards
  • Banks
  • Online dating
  • Charity
  • Ransomware
  • Real estate
  • Emails
  • Seniors

Individuals who are in the business of laundering money from other people regularly employ scare tactics or otherwise prey on the perceived vulnerabilities or weaknesses of their targets. This sometimes occurs in the form of posing as an IRS official or tax collector, conning people into investing in phony charities, or even emailing forms and asking targets to fill in their personal information.

In other scenarios, scammers may form insincere relationships with targets via online dating websites and then ask for money. Senior citizens are also prevalent targets of today’s fraudsters since they are likelier to lack certain knowledge about technology.

Take Precautions

The ability to pinpoint certain scams is important. Choosing to be proactive and take certain precautions is also of equal, if not greater, importance.

First and foremost, if something sounds too good to be true, then it probably is. Secondly, always be especially cautious about what you choose to click on. As previously stated, many scammers and hackers employ ransomware as a means of gaining access to someone’s critical files. These people usually then demand to be paid a fee in exchange for returning the aforementioned information.

At the end of the day, scammers are becoming more and more crafty. This is why researching agencies, being wary of sharing personal information, and thinking twice before downloading certain attachments can amount to a world of difference.

A Final Word

Financial scams are all around us. Countless people have fallen victim to them and many others will likely follow suit as time passes. However, by knowing some of the most basic strategies of fraudsters and taking the appropriate precautions, you can save yourself from a world of grief and simultaneously protect the money which you have worked hard for.

 

Authored by Gabrielle Renee Seunagal

How to Financially Prepare to Leave Your Parents’ Home

As the cost of living becomes more and more expensive, many young adults are living at home with their parents or other relatives. However, many people reach a point and time where they wish to live on their own. This is quite understandable and to be expected; however, leaving home and venturing out into the real world requires serious, calculated preparation. This is not something which should be done carelessly or on a whim.

Anyone who is thinking about leaving their parents’ homes will benefit from the following pieces of advice. Not only do they provide insight regarding this particular situation, but the forthcoming tools can also be applied to achieving general, economic success.

Know the Cost of Living

In general, the cost of living greatly varies according to one’s geographical location. Bearing that in mind, young people who wish to leave their parents’ homes should first know how much it will cost them to live on their own, explains Money Crashers.

This means doing research and looking into not only the costs of rent, but also utilities, groceries, transportation, and miscellaneous fees. Many young people may be shocked to learn that independently supporting themselves is more costly than they thought.

Have A Decent Amount of Funds in Savings

Even in the best of situations, unexpected events have a way of popping up. This is why The Balance advises young people to have extra funds put aside in case of emergencies. Car accidents, damage to valuables, and other unforeseen occurrences happen each day and preparation is paramount. Having a few thousand dollars put aside in cases of emergencies is a good idea and will likely pay off sooner or later.

Try to Minimize Use of Credit

One of the biggest financial mistakes people make is overusing credit cards. They continuously swipe their cards and are then unable to pay the bill when it comes due. This leads to subsequent interest charges which quickly pile up on top of the original debt. Before you know it, interest outweighs income and people sink further and further into financial hardship. For this reason, Mint urges young people to minimize their use of credit and reserve credit cards for only emergencies.

Of course, doing this requires a degree of discipline and stable, regular income, but reducing one’s use of credit is much better than the alternative.

A Final Word

In many regards, moving out of your parents’ home and becoming financially independent is a rite of passage. The majority of society also views this milestone as the true beginning of adulthood. By knowing one’s living costs, saving money, and using credit as infrequently as possible, young people will more than likely do well for themselves as they venture into the world of adulthood and independent living.

 

Authored by Gabrielle Renee Seunagal

How to Financially Prepare for a Recession

Nobody likes to think about recessions and all the havoc which they can bring upon a society and to the economy. Nevertheless, many people have lived through and experienced the plights of recessions. Although they take a toll on virtually everyone, members of society who are most vulnerable and least prepared tend to suffer on considerably higher levels. This is what makes financial preparation so absolutely paramount.

Failure to plan is ultimately a plan for failure. However, the following steps will allow people to not only prepare for a recession, but also protect the businesses and funds which they have garnered over the years.

Consistently Save Money

As stated by Money Talks News, constantly putting aside money always make a big difference, but it especially comes in handy during a recession. Financial advisors currently recommend for people to put aside at least six months to one year’s worth of living expenses. This is something which a surprisingly high percentage of people fail to do. Many of them believe that a crisis will not befall them, but a safety net always comes in handy. Consistently saving a certain percentage of funds from each paycheck makes a difference.

Saving money prior to a recession can truly determine the difference between survival and homelessness.

Look Into the Gig Economy

There are many opportunities which exist within the gig economy. Driving for Lyft/Uber, renting out rooms on Airbnb, content writing, graphic design work, and more are all opportunities which people can and should take advantage of. Not only does this allow for individuals to create an additional revenue stream, but funds earned in the gig economy can be put into savings, bills, etc.

Every person will find that money and savings are their greatest economical allies, especially in the face of a pending recession.

Pay off Any Incurred Debts

Another important thing to do in preparation for a recession is paying off debts. No matter the state of the economy, credit card companies will continue to charge interest for unpaid balances. Over time, this can truly chip away at your income; besides, any money which goes towards interest is lost income which could have otherwise gone towards savings or bills. It’s also worth noting that paying interest does not decrease one’s debt, but merely lessens the fees for not paying one’s debt on time.

Money is an incredibly valuable resource; it becomes infinitely more valuable during times when the economy is experiencing a recession. For this reason, everyone should be actively working to become debt-free.

A Final Word

Ideally, people should be saving money, creating additional revenue streams, and paying off debts regardless of whether or not a recession lies in the near future. Being in the strongest financial state is always the best way to set oneself up for success. While economic recessions might prompt stronger precautions, you can never go wrong when you are in good financial health.

 

Authored by Gabrielle Seunagal