Why Invest in startups

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Why Invest in startups

Any company who wants to begin investing in startups needs to start by finding out what their specific goals are, as different goals will lead to different operating types and different measures of success.

The Financial Return

Investors who are maximizing financial return focus  on the size of the opportunity the startup is tackling and their performance. Corporate venture arms all have a different point of view on the balance of financial and strategic considerations. For example a number of the best performing and most active companies  such as Intel Capital and Google Ventures are more focused on financial performance over strategic considerations for the parent company.

Consumer Insight and Learning

One of the best reasons for something like an accelerator is to simply have more face time with people, with the best consumer experience. Investors get access to data and insight that others wouldn’t, which can provide an advantage that others people might not have.

Future Proofing

The idea of future proofing is investing in companies that represent a likely growing rate of your industry. The media world has been particularly good about this kind of investment, exemplified by major investments in and lots of multi-channel networks from old media powerhouses like Disney.