Silicon Valley has been long known as the land of innovation and is an area in the United States where startup companies truly have the opportunity to flourish. And according to the way investors are investing their money, they agree with this too. If you look at the billions of dollars being spent by investors in startup companies each year, you’re going to see an overwhelming number are investing in startups in Silicon Valley. Are you an investor looking to invest in one of these startups? Then took a look at some tips on how to do it right.

If you’re planning on investing in a startup, then make sure that you’ve got a significant enough amount to invest in one company. Don’t go on the theory of investing small amounts all over town. For new or moderate investors, $100K or more may seem like a lot, but if you’re not willing to write out a check for at least that amount, than be weary. Time and time again, you’ll see that unless you have a large sum like this to contribute, you’re not going to be able to get the best deal on your end, and negotiate towards an agreement that will be highly beneficial for you.

In addition to the initial large investment, you’re going to want more money set aside for any investments you wish to make later to continue growth in the business, so keep that in mind.
Get as much information as you possibly can. In Silicon Valley, there’s a startup looking for capital at every turn, so you have a lot of options as to where you want to invest. Make sure that you have many potential investment areas to invest in, so you can take time and give it some thought before you hand over a large sum. Once you’ve got some potential candidates that you may want to invest in, then do some more digging and get to know the company well. Also, make sure that you’re keeping your investment pool in one major industry or area.

If you spread out and go everywhere with your investments you’re missing out on the opportunity to become an established authority in a particular industry.
If you’ve got the ability, once you’ve found a series of related startups in the same industry, if you have more than $100K to invest, then try investing in more than one startup. Like all businesses, startups have a chance to fail, but if you spread out your investments a bit, and then you are improving the odds. Also, find a quality group of people at a startup that you can work with; people who understand what they do, how they do it and why they do it – people who care about the product and the customer.

The people make the business just as much as the product and if you can’t get along with a group running a startup, then reconsider your investment until you can work with them.