When we think of venture capitalists, we typically think of well-heeled entrepreneurs who have already made their fortunes sliding directly into the role of General Partner. Or we think of very wealthy people starting funds on their own. Of all the myths around venture capital, the most persistent is that it’s a game strictly for the rich. But there are ways for those with more modest bank accounts to get in on the action. Not all routes are easy, but some are simpler than others.
If it’s a job you’re seeking, you can cross your fingers and hope to land an entry-level position and work your way up, but we all know that analyst/associate jobs at these firms are few and far between. A more promising avenue is to get involved in the entrepreneurial community, establish solid relationships with key people, and begin connecting those people. If you uncover the next big idea and do your due diligence, VC investors will pay attention and perhaps, ultimately, invite you into the fold.
Another, more straightforward pathway is to become involved as an everyday investor. This is easier to do than ever before, given the increasing democratization of the industry. US regulatory changes implemented in 2017 now allow any investor, regardless of income or net worth, to join the venture capital sphere. This move is already revolutionizing the industry and introducing new players on a near-daily basis.
Would-be VC investors can also get their start through crowdfunding. Kickstarter, Indiegogo, and 99 Funding allow those of modest means to invest in ideas or companies around the world. Understandably, the public wants in on future successes like Uber and Airbnb, just keep in mind that such opportunities should be thoroughly vetted, as the companies running these campaigns have often been passed over by career venture capitalists. You might find a diamond, but be aware it’s possible to end up in the rough.
Further alternative funding methods have emerged in recent years. AngelList offers access to syndicates, or VC funds created to make a single investment and led by experienced investors who have already done the research. More traditionally based platforms like TSX Venture Exchange pairs early-stage, profitable companies with public venture capital from a variety of sources, backed by the reputability of a major public stock exchange.
There are plenty of firms out there scrambling to put together innovative new products just waiting for your review. Blockchain Capital is creating a new fund for everyday investors looking to support emerging blockchain technologies. OurCrowd, a hybrid of angel investing and venture capital, allows “average joe” investors to commit alongside billionaires and get the same deal price and equity.
If you’ve ever dreamed of investing in venture capital, now is the time. With all the fortunes made and world-changing products developed through the VC process, there are more opportunities than ever that have arisen to meet growing public interest. As always, take every pitch with a grain of salt, and do your homework. But once you’re ready to take that first step, an entire world of opportunity is at hand. The marketplace is more open than ever, so don’t be afraid!