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Things To Expect When Investing In A Startup

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startup investment
Making the first move is tough, but it gives you the confidence to lead a crowd behind you and take them along the right path.
Investing in startups is an exciting and challenging process. The investor must choose his area of interest before financing, since it’s vital to understand the business mode,l and you can also help the startup with your strategic inputs. Depending on your investment profile, you can choose the following options to fund a startup business.
  • You can create a profile on global platforms like AngelList and CrunchBase to look out for interesting startups.
  • There are also different deal making platforms like LetsVenture and Venturefund.com that will help you to get connected with the startup community.
  • Crowdfunding is another choice if you want to invest smaller amounts along with another group of investors with common interests and risk appetite.
  • You can also try to establish contact with accelerators to find better startups to invest in.
The startup ecosystem is highly volatile, so before you decide to invest in a startup business, you need to consider many things like the liability, accurate valuation of the firm, your timeline, and your exit strategy. Most of the small-business investment opportunities come from friends, family, or word of mouth. So, before you get into financing a new venture, measure your steps carefully. It’s vital to understand the business model and the revenue generation model.

Understand the structure of the business

There is always a chance that a startup business may fail. So, you need to understand the structure of the business and the risks involved in detail. Many startup businesses shut down within the first five years of operation mainly due to a flawed business model. Hence, if you do not understand the structure of the business, the chances of failure is high. It is important for the investor to limit their liability in the business. So, before investment, drafting the scope of the partnership and the associated liabilities is crucial for an investor.

You may not see profits in years

If you want to invest in startups, make sure that you are not in a hurry. Putting a large sum in a business can be a risky affair, and there are chances that you may not see any returns in years. Set milestones accordingly and understand the potential of the business to break even.

Plan an exit strategy

Investment in a new business venture means taking a risk. There are chances that the venture may fail and your investment is lost. It is good to wait for five years before you can expect some return on your investment. However, this varies depending on the nature of the business and if you need some liquidity before that period, you should plan a proper exit strategy. These clauses should be clarified upfront before investing and should be agreed upon by both parties with a legal stamp.

Homework

There is rarely any match between your expectation from the business and the real scenario. So, before you invest a lump sum amount in a startup, you need to do a SWOT (strengths, weaknesses, opportunities, and threats) analysis of the project. The startup should also have a proper business and marketing plan. Stay involved and review the performance of the startup periodically. You may consult a business valuation expert to take the correct decision.Happy investing!

Business

Business Insurance And Why You Need It

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business insurance
Business insurance is a requirement that you should not ignore even if you are in a low-risk workplace. For certain business sectors such as healthcare industries, mechanical workshops or amusement parks, getting a liability insurance is essential. Finding the best insurance can be a challenging and complicated process, but it is better to get an insurance coverage. Disasters happen, and you need an authorized protection to save you from severe economic loss.

Why is business insurance necessary?

If you start a business and employ some people, you need to have business insurance. It is a legal requirement. The insurance coverage varies from one country to another. Almost all countries have made it compulsory for the companies to get a liability insurance. You may think that your business is small and has less risk. You can also think that you can afford the losses your companies might face. The business experts always advise getting a proper insurance for every kind of business. There can be natural disasters like floods or earthquakes. Fire accidents and thefts are not the only risks. Your business can incur massive losses due to disruption of work. There can be cash crunch, skilled labor crisis, road work, police barricades and criminal acts too. You should consider all the aspects before buying an insurance coverage for your company.

General Liability Insurance

Almost all trades have some liabilities. So, a general liability insurance is essential. Before you hire some employees for your business, get a liability insurance first. Your company becomes the ‘employer.’ It becomes a legal need if you wish to make your business a limited company. If any of your staff falls ill or faces any fatal accident during working hours, your company becomes liable. You need to discuss with your insurance broker about the amount of liability insurance cover your business needs. If there is any death because of their work in your company, you need to arrange appropriate compensation. So, you should avoid any expense trimming while buying insurance for the company.

Professional Liability Insurance

It is also known as errors & omissions (E&O) insurance. This is not a one-size-fits-all insurance. Each industry has different concerns while running the business. So, you need customized coverage for your business. The professional liability insurance protects the business from the claims that the company was negligent in performing their services accurately. When you buy the E&O insurance, make sure you appoint an attorney for your company who can defend the lawsuits filed against the company.

Property Insurance

Property Insurance is a must when you run a business. Be it your own building or leased property, you need coverage. This insurance covers your business inventory, equipment, signage, and furniture from any losses due to fire, storm or burglary. Home based businesses still do not get much coverage from property insurance. You need to ask your insurer for extra coverage.

Product insurance

Apart from the above-mentioned insurance policies, you should get an additional product insurance to cover your manufacturing business. It covers any loss due to manufacturing, distributing and retailing hitches.Buying insurance for your business is complex. You need a trustworthy insurer. Every business needs a unique package based on the requirements of the company. You should always review your insurance policies and keep them in active status.
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Business

These Are All of the Industries Experiencing The Amazon Takeover

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amazon takeover
Amazon’s continuous growth is prompting the company to expand into a variety of industries well beyond their initial scope of electronic commerce. Beginning as an online bookstore, Amazon now represents the
most valuable United States retailer regarding market capitalization. Amazon founder Jeff Bezos is presently the world’s richest personA combination of success and drive for constant expansion is resulting in an Amazon takeover of several important industries. Amazon still reigns supreme as an online retailer, though clearly that title alone is not enough to satisfy Bezos. His areas of interest are vast, including the following.

Brick-and-Mortar Retail

Just last year, the Amazon takeover included Whole Foods, where they were acquired for $13.7 billion. The move continues Amazon’s battle with Walmart to reign supreme in the retail space. On the other side, Walmart is continuing to refine their online space, while remaining America’s top employer. The battle between these two giants will continue to wage on, with Amazon’s interest in the brick-and-mortar space being no secret.Even before the Whole Foods acquisition, Amazon’s plans to build convenience stores and curbside pickup locations shows a deep infatuation with becoming a strong brick-and-mortar presence. Beyond a mere presence, Amazon is confident that consumers will continue embracing a model that allows them to order online and pick up in person.Amazon's opening of the Amazon Go Store in Seattle in January marks an exciting time for these interests. Customers enter the store and scan their Amazon Go app as they do. Cameras and other sensors track customers' activity as their browse, registering an item into their virtual cart when they take it off the shelf. Customers are charged when they leave the store with their goods. Amazon terms the idea "Just Walk Out" shopping and hopes to attract customers who despise waiting in lines, as many do.Amazon’s reshaping of the typical brick-and-mortar presence is introducing consumers to new ideas like “Just Walk Out” shopping. Combined with the acquisition of Whole Foods, the company will without a doubt continue to redefine the brick-and-mortar shopping experience.

Delivery

amazonAmazon has been shaping the delivery industry for many years now, especially since Amazon Prime’s introduction in 2005. The company’s vow to deliver items to Prime customers in two days or less still presents a challenge to online retail competition, who are well aware that they must match these shipping expectations or compensate in some other way, like offering lower prices. Meeting Amazon’s delivery promises and their costs is a major challenge, especially to new eCommerce businesses.Beyond Amazon Prime’s major influence on shipping expectations among online retailers, Amazon is redefining what the delivery space means through their utilization of drone technology. Specifically, Amazon Prime Air is introducing a new delivery system, where unmanned aerial vehicles can safely get packages to customers in 30 minutes or less.Amazon, already familiar with quick parcel delivery, is upping the ante even more in the delivery industry with such lofty ambition. Still, with a private trial already underway in the UK, Amazon Prime Air and the use of drones in delivery is a very real aspect of the future. Upon receiving the regulatory support, we can anticipate Amazon Prime Air to be an option for many.

Technology

amazonIt makes sense that Amazon is continuing to make significant moves in the tech sphere. There's no doubt regarding the company's technical expertise and how technology can accommodate access to their variety of products.Among their technological products is Amazon Fire TV, which streams live TV and enables users to watch hundreds of shows and movies. There's also the Amazon Kindle Fire, which capitalizes on Amazon's vast digital library in the form of a tablet computer with a seven-inch multi-touch display. Many still view Kindle Fire as a strong competitor to Apple's iPad.Amazon's Dash buttons, while simple, are also an exciting addition to their array of tech. The Dash Button is a single-function controller that consumers can place around their house near items that need replenishing. Need a new order of Tide paper towels? Order a specific Dash button for Tide, put it near the towels and press the button when you notice them running low. They will then arrive on your doorstep in a couple of days.

Entertainment

amazonAmazon Prime offers much more than free two-day shipping. One of Prime’s most notable benefits is the increasingly impressive Amazon Video platform. The Amazon Prime Video show Transparent won the Golden Globe Award for Best Television Series, Musical or Comedy in 2005, while 2017 Oscar Best Picture nominee Manchester by the Sea is also developed by Amazon Studios.Amazon is increasing their influence in both TV and film by producing excellent content, including many notable releases in development. They’re emerging as a viable competitor to cable, Netflix and Hulu.Whether a consumer prefers reading a book or watching a movie, Amazon is seeking to have the entertainment niche covered.

Is This Amazon’s Peak?

Amazon’s firm grasp across multiple industries begs the question: Is this Amazon’s peak? While it’s impossible to tell definitively, stockholders should monitor the situation closely. Amazon has been a model of consistent growth since 2000. Presently, Amazon’s stock trades for approximately 130 times the business’s projected earnings for 2018 and almost four times its projected sales for 2018.These growth prospects rely on revenue per customer growth. Although there will certainly be customers who increase their spending on Amazon, it's difficult to think of any huge breakthroughs or offerings that will prompt more revenue per customer, especially upon Prime's increase to $119 per year. Many customers may opt to spend that on a Costco membership instead.Additionally, it's important to note that Amazon's acquisition of Whole Foods plays a significant role in the stock increases the past year for Amazon. The market seems to be operating under an assumption that Amazon will make a similarly buzzworthy acquisition this year, which is far from a given.Still, even if market projections seem a bit optimistic at the moment for Amazon, there's no doubting that the company will continue playing a significant role in shifting expectations within several industries, from delivery and entertainment to the brick-and-mortar experience.
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Business

What To Do When You Lose Creativity

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Advice to regain creativity
The longer you are tasked to creating things, the more likely you will lose your creative edge. It doesn’t matter if you're making websites, writing a new book, or making a new recipe. There might come a day when you feel too lethargic to get out of bed or dread going to work. These are some of the most basic and easy-to-shrug symptoms of losing the creative streak. The good news is that there are ways to snap out of it. You can regain your creativity and prevent yourself from "drying out" by practicing a few simple tasks.

Explore

When we were kids, it's always fun to experience new things for the first time. As we get older, our sense of wonder gets jaded, probably because we had to grow up and face reality. But rediscovering how great the world is can help awaken our creative streak. To prevent yourself from losing it or to find it if it’s already lost, explore and experience new things again. You can set aside one day a month to try something new, be it an experience, new dish, or venturing out to a new place. Adventure can reawaken creative juices and your sense of wonder.

Laugh

One of the reasons why we lose our creativity is pressure. It can be quite stressful if you’re always looking for new ways to make your design look fresh. Sometimes it is even unavoidable that your paintings, essays or web designs all look the same way. Stress can kill creativity, so what better way to de-stress than to laugh? You can watch a comedy movie, catch a live comedy act, or just clown around with your friends. When your brain is filled with oxytocin and dopamine, which we get from laughter, you will be more relaxed and find it easier to find inspiration for creativity.

Think Like A Kid

If you’re asked to be creative, ask yourself what your six year-old would do in situations like these. Kids can be very creative and surprisingly straightforward. It might feel weird at first, but you never know, so you might as well give it a try and see if it works.

Rediscover Creative Pursuits

When was the last time you painted something, read a good book, sang, danced like nobody's watching, or even modeled clay? All these creative outlets sometimes get lost because of busy lives. However, you can rediscover them again if you set aside time at least once a week to be creative outside your work.

Meditate

Mediation is a good way to relax both the right side (creative) and left side (logical) part of the brain. When they are both relaxed, they work harmoniously so you don’t run out of creative ideas. Some people think that they don’t have much time to mediate, but it can be surprising what 5 to 10 minutes of meditation can do for your brain. Meditation does not have to be complicated. You can start by thinking happy thought for 10 minutes each day for relaxation, and you will be surprised how easy it will become to carry on creative tasks.When it comes to being creative, pay attention to yourself. Find out what works and what doesn’t. This can tell you when you are most inspired, which in turn can really help you to continue being creative.
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