- Never invest more than you can afford to lose.
- Invest only in what you understand - preferably, a product or industry in which you have some expertise.
- Diversify – it is better to have multiple smaller investments than a few larger ones and to be in different verticals, products, or industries.
- Learn from other investors - startup specifics can be challenging to understand for a new investor; if the used terminology is unclear, ask questions and follow the actions of the more experienced participants.
- Be useful - try to back the startup after you invest, too; your experience will undoubtedly be richer.
Our advice? Solely invest in the startups you understand, in the industries you are passionate about. If the product appeals to you and you trust your decision, then it is most likely a good investment.
If you do not understand either the product or the way it works, before investing you must get to know about the founders, the startup, the industry, the size of the market, and if there are any similar ideas.