

Fell in love with a product/start-up, want to invest in it - lezginka

The other day I signed up for a product offered by a small start-up.  I fell in love with the product that does everything I need and more and the company itself.  I looked up the company and noticed they got about $200k of financing from various venture groups (mostly small ones). I would like to approach the founder and invest about 50K. I've never done this before.  What do I ask in return? How to I approach the founder?  What do I say so I dont turn him off? Any pointers will be appreciated.
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jeffepp
Startups get approached all the time (ones with traction & articles written
about them) so simply tell the founder you love the company and would like to
invest.

If he has raised money he will not be turned off by your approach.

Your best bet is to join in a round (if it is open) otherwise, it may not be
feasible given the other investors and legal issues involved.

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staunch
One thing to be aware of is that they can't safely take your money unless
you're an accredited investor. Hopefully you meet the requirements or you
wouldn't put 50k down but FYI.

<http://www.sec.gov/answers/accred.htm>

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lezginka
Thank you. I just checked, looks like I fall in one of the categories listed.
Never knew I am an accredited investor :)

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Sloven
First of all you should to analize theirs finance situation. If you don't know
how, then invest smal part of money. And then, if all goes well, you could to
increase the value. Otherwise you just lose your money.

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calbear81
If it's a great product with lots of potential, the startup may already have
an oversubscribed round so you'll have to pitch them on why you should be
allowed in. It's best if you can bring something other than $50k to the table
since a startup is always looking for someone who can provide either
mentoring, connections, and help with other aspects of their strategy.

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thewordpainter
Also consider how much you'd be willing to invest overall. if they took off,
you want to make sure you can maintain your stake. it's probably better to
start with a more conservative position, and leave yourself room to re-up.

