Tips for investors on how to spot the next Careem
The Uber-Careem deal has incited a renewed interest in investors to find the next Careem, in order to cash out big. Here are 5 tips that will help you do that:
Invest in people: Most of the startups fail due to self-destruction than competition. The people running the startup, their personality, perseverance and ability to translate plans into reality is much more important than the idea itself, no matter how innovative it might be.
Don’t follow the trend: A trend is basically formed at the peak of the curve when the market has already seen many interested parties sign on. Don’t let the crowd dictate your investment judgement.
Diversify your portfolio: It is the only way to reduce risk and maximise returns probability. Softbank has a major stake in Uber, but also in its local Chinese and South American competitors. That is diversifying vertically.
Focus on startups with recurring revenue: VCs and private equity managers are avoiding subscription-based models for the high-growth software-as-a-service model; as the latter has a recurring revenue model that is very attractive.
Research how they see the future: Dig deeper into the startup’s long term vision and how they see the world changing—and how adept they are to accommodate and work with those changes.
Read more about these tips here.