Seed Capital investment strategies

12 Replies

I have a large sum of seed capital from REI available for further investments. What percentage of my seed should I utilize on startups, compared to reinvestment into real estate? I would like to diversify, and I hear tell of startup unicorns(?), that have proven to be very lucrative investments in today's market.

instead of investing in start ups.. just buy a nice little building and start your own incubator.

trade rent for small % of company.. when one hits it big you make a bunch of dough

Trevor I have to agree with @Jay Hinrichs if you want to diversify while also hedging your bets with a good margin of safety. I co-founded a startup and am currently in the process of building it up and getting VC funding. I have been doing a lot of research on funding as well as talking to VCs and other founders who have gone through the process. The odds of investing in a unicorn, which is a company that is valued at or over $1 billion, are under 2% and the probability of a startup failing is around 75%. While you can hit it big betting on a startup, such as Uber or Google, the odds of losing money is a lot higher. 

As a side note though if you would like to start investing in startups my company is open to accepting outside funding at this time, you can DM me if you'd like.

@Jay Hinrichs I am very interested in the Incubator/Co-working space scene, what are some of the unique requirements for the hosts of these venues? What sort of tenancy agreement is worked out with the startups in question, and how does it relate to their business licences? I have acquired a great source of seed capital for an upcoming project, but I would just like to ensure I'm not going in blind. 

Mr. Seed   I don't know most of the answers of your question.. however having been raised in Cupertino I have been in a few incubators.. and they look pretty much like you would see on TV

the one that realtyshares started in was in one of the TISCH buildings in Mtn View CA... it was one floor of a 10 story office building it had secure elevator access.

when you popped out the central area of the floor was eating area.. of course you have to have a ping pong table.. and some other cool stuff kids like.. then if you can think of all the little incubators along the walls all the way around the floor all 4 sides.. and then some out in a bull pen type arrangements.. it was fun.. kids working on all sortys fo different apps software and things.. RS was working on their crowdfunding platform and had about 3 folks in there with their computers etc.

I suspect the business deal needs to be some sort of contract that also includes a space to work.. Lawyer can work that out.. might want to find a lawyer in Silicon valley who is familiar with how they do these

Maybe try investing your seed capital with an experienced VC, who has dealt with startups in the past. Or perhaps keep it REI, and invest your excess capital in a real estate investment fund.

I agree with  @Hank Wu if you are truly interested in investing in startup businesses, but this is a forum for REI, so I have to recommend the co-working space over the small time venture. I have to wonder however, where co-working space will be in 10 years time. How will technology and connectivity change the way we work together and collaborate?

@Jay Hinrichs That sounds very interesting. How do you keep up the cash flow though if you aren't taking in any rents? @Joseph DiNardi-Mack 75% is actually quite a conservative estimate from what I have heard. Startup Muster reports that 90% of startups fail within the first 3 years. I would love to learn more about your startup if you're open to a DM. 

Originally posted by @Jack McTavish :

@Jay Hinrichs That sounds very interesting. How do you keep up the cash flow though if you aren't taking in any rents? @Joseph DiNardi-Mack 75% is actually quite a conservative estimate from what I have heard. Startup Muster reports that 90% of startups fail within the first 3 years. I would love to learn more about your startup if you're open to a DM. 

 you have money... and don't need rents..  One of my investors did this and his stock he took in exchange for rent is now worth over 5 million when it becomes in restricted.. when I grow up and get rich enough that's what I am going to do.. offer free rent in exchange for ownership of the companies or founders stock.

Originally posted by @Account Closed :

What happened to Trevor's account? He DM'd me and seemed a very genuine person, both polite and insightful. Why would the Moderators close him down? @trevor seed

 I don't have any information on that but I wouldn't assume the site closed his account. Individuals can delete their own accounts if they so choose, and people occasionally choose to do so for their own reasons. Generally it takes multiple or egregious rule violations over several episodes to get deleted here unless it's one of the many spam-bots that attempt to break in on a regular basis. 

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