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Art Of Investing And Its Two Major Facets

For me, the art of investing lies in balancing two major facets: the return one seeks and one’s ability to control risk.

I actively try to invest in businesses through private equity splits because I believe I can handle the above two major facets well for this investment vehicle. I know what it takes to succeed in a business since I have been an entrepreneur right from my mid-teens.

In the present day, I can only gamble in publicly traded stocks or real estate with my investment, to be honest. However, I am trying to get the education and experience required to succeed in these investment vehicles one foot after another.

Elaborating on what I think I know when I actively try to invest in a pre-seed/seed stage business, the return I seek is mostly dependent on the cash required to go-to-market for the first time and fail.

The more frugal the startup, the more the financial runway for market experimentations. With each failure, more capital gets injected knowing that the entrepreneur will be frugal with the business expenses. In short, more market experimentations, more chances of striking gold, and more returns.

On the other hand, my ability to control risk is dependent on my business connections and expertise in picking the right entrepreneurs to fund.

When I balance these two facets by maximizing capital injection and minimizing risk with time, I hit an optimal point where I can confidently predict that I’ll make good returns on my financial investment.

This is the ideology behind my way of angel investing.

If you’re an entrepreneur and you know your stuff, angel investing may be the best route for you to take as an investor. If not, sticking to public shares and real estate is a better bet.

Side note, to start as an angel investor, you can start off with as low as NPR 300 in Nepal. However, the entrepreneur should find value in you to bring you on his/her journey.

That NPR 300 is for your coffee meet if you’re having two Americanos.

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