Startup Scouting’s Best Practices, and How to Find the Next Unicorn
Every investor dreams of finding that unicorn before everyone else. That one crazy startup idea that goes from unknown to globally recognized in a short amount of time.
A tech startup that will give you the returns on your investment that you have always been hoping for. Finding those unicorns is rare, that’s why they are called unicorns to begin with. But there are many things you can do to improve your chances and invest in some quality startup companies. For startup scouting and our technology scouting best practices, keep reading.
What is Startup Investing and Scouting?
Startup companies are new, always less than 5 to 10 years old. They have ideas and a plan to get them on the market. In order to do this, though, they’ll need some investors. That’s where you come in. When you invest in startups, you get a portion of the ownership of the company, which will entitle you to a share of the future profits. Working out a good deal with a startup company can lead you to financial growth and capital gain like you have never seen before.
With that being said, startup scouting is finding the right startup companies for you to invest your hard-earned money in. Scouting is a very important process that requires a lot of attention to detail, time investment, understanding of the market and consumer, and so many more factors. And it may be in your best interest to be scouting for unicorn companies. In the world of startups, a unicorn is a startup company with a value of over 1 billion dollars. Your goal as a unicorn startup scout is to find these future unicorns before others realize their potential for growth.
Why Search for an Unicorn?
You can always play it safe and invest in a surefire company, one that is already seeing success and is proven to be profitable. Sure, you’ll see some returns on these investments, as the company steadily inclines, but with an already successful and invested in a startup, you are missing out on the early-bird benefits. You really want to get in on the ground floor. Seeking out these unicorns are a riskier investment, but if done carefully and with wisdom, you’ll see greater returns on your investments than ever.
Early investors will strike the best deals with startups. These small companies will really need the money and will be much more willing to give quality benefits in return to their generous investors. Unicorn scouting works for this reason. So, you could play it safe and make little investments that see small returns, or you can really get in on the action and support small creators who would reward you handsomely down the line.
Steps to Quality Scouting
It is easy to just blindly search for startups you can invest in, but the results you’ll find on the Google homepage won’t get you those unicorns. You are going to have to dig deeper than that. To get started with startup sourcing, you will need to follow these steps:
The first thing you’ll want to think about is your niches. What types of startups will fascinate you the most, give you the best returns, and pair nicely with your brand? You want to think broadly but also somewhat narrow your focus. Looking for “tech startups” is going to get you far too many results, which will bury the innovation in a sea of bland startups you have to sift through. Consider the areas of focus you will want to attack, but be ready to potentially reconsider if you stumble upon new ideas you hadn’t considered before.
You now have a starting point for tech startups to invest in, so it is time to get looking. For this process, it is best to work with a company that is experienced in scouting and has the AI technology to find exactly what you’re looking for, even in the most secret parts of the internet. You will enter in your keywords based on the niches you have decided on and your professional scouts paired with their advanced AI will find the potential unicorns for you.
Now that you have a long list of startups catered to your interests, it is time to start looking them over. The evaluation process should take a long time, considering there are many factors to consider when choosing startups to invest in. If you are on the hunt for unicorns, you have to evaluate startups through this lens. Be on the lookout for things that don’t have a lot of attention right now, but you know could be wildly successful down the line. Get into the mind of the consumer who would be after this technology. Consider the benefits as the ideal customer. Study the target audience and see if similar products or services have been successful for other startups. There is plenty of information out there for you to find and incorporate into your scouting, so be sure to utilize all your resources to make the best decision for you.
If you feel you have found the right scout company for you to invest in, it will then be time to make a connection with them and begin the process of negotiation. For this, you will have to bring in a lawyer or full legal team to ensure you are getting the best possible deal out of this. Deliberations may take some time, but it will all be worth it if you can get in on the ground floor with some tech innovations.
Engage in Passive Scouting
Many investors spend their time actively searching for the answers to problems through startups. They will think of an idea, see if there’s a company that addresses this idea and go from there. This can work for making some sound investments, but it is not likely to find you any unicorns. To be a unicorn scouter you have to be an innovation scout, which means finding startups who are addressing problems you didn’t know to search for. Passive scouting means allowing the unicorns to come to you with their innovative ideas. Casting a wider net in your scouting will surely bring you more exciting leads. And, with the help of a startup scouting program, these innovative startups can be brought right to your inbox.
Why Bother with Startup Investing?
This may seem like a lot of work just to potentially stumble upon a gold mine. What are the benefits? How do you know you’re not wasting your time? Well, here are just a few benefits to consider when you consider beginning your startup scouting journey:
Diversify your portfolio
Investing in many different sectors is important as a dedicated investor. The more unique ventures you are getting into, the more chances you have to see some success. Startup investing may lean towards the riskier side of things, but more risk equals more reward.
Early insights into new technology
Startups can really change how we do business or live our everyday lives. If you are taking the time to investigate some of these startups, you’ll have access to some insider information. You will most likely encounter some companies that will shake up the business or consumer world in the near future. This will give you some time to prepare or plan what you will do in this scenario, giving you the edge over your competitors.
Collaborate with new people with new ideas
Successful startups are owned and run by brilliant minds. Getting these individuals on your team could serve to be an incredibly valuable asset. Additionally, the product or service being offered by the startups you invest in could directly benefit you or your business. This is something to keep in mind while scouting. It is great to invest your time and money into things you personally care about and that could serve you in the future.
Receive bigger returns on investments by getting in early
A small startup company that is more desperate for funds will give you a better deal than a company that investors are already very excited about. If you see something worth investing in before anyone else sees it, then you’re in for some generous rewards if you play your cards right. Unlike some other forms of investments, growth for startup investments is exponential. There are no limits to the returns you can make if you find your unicorn.
Support ideas you believe in
Apart from all the financial benefits and new business opportunities that can come from startup investing, there are also plenty of personal and emotional benefits. You can set your sights on companies that are making changes in the world in ways that matter personally to you. With startup scouting, you can look out for companies that are innovative in meaningful ways. Startups can change the world for the better, and you could be a part of that positive change.
The Best Tech for Startup Scouting
If you really want to be a successful scout, you’ll need some help. The experts over at Startup Scout are ready to get you started on your journey. With cutting-edge AI technology, their databases will scour the internet, even into the deepest and unknown corners, to find you the right startups to invest in. You’ll find plenty of worthy startup companies quickly, making the scouting process so much easier. Be sure to check out the form at the bottom of the page to request a demo and get started with Startup Scout.
Whether you’re an accelerator, innovation lab, or VC/PE fund, we cherry-pick all the startup leads you'll ever need, so you can focus on what matters. Let us find you the next unicorn!