4 Ways to Enter the Market as a New Investor for Startups

By Sony T
7 Min Read
4 Ways to Enter the Market as a New Investor for Startups 1

The stock and other financial markets have seen major activity over the last year, as investors looking to safeguard their money from low-interest rates and inflation look to equities and even cryptocurrencies as stores of value. The market has also crossed over into popular culture over the last several months with scandals like Gamestop and Tesla’s purchase of 1.5 billion dollars worth of bitcoin. You don’t need to have been paying attention to the financial news to have heard names like Robin Hood, a popular brokerage for small and first-time investors. 


Taking that first step into the markets is daunting, especially if you are thinking about investing in a startup. Knowing how and where to invest money, even if it is only a small amount, takes research. Pushing that buy or sell order requires a steady hand, patience and an ability to handle stress and having trust in a new, unproven business involves some faith. Below are 4 ways to enter the market as a new investor. 

Advisory Services 

Advisory services are very popular and, thanks to social media and the accessibility of blogs and personal publications, many reputable people with solid financial service industry credentials and a long history of success are now offering their expertise to retail and first-time investors. 

While you should always do your own due diligence before investing your money in anything, following advisors and investors–people who share their weekly startup picks and punditry with their followers, website visitors and subscribers–is a good way to learn the ropes. Some services are paid, others are free, but whether you actually take their advice and invest your money or simply follow along to pick up new knowledge and information, learning how to approach investing in startups from the pros is always a wise idea. 

Index Funds 

Index funds are investment vehicles that give you exposure to the entire market or the entire economy. The S&P 500 Index Fund, for example, invests your money in a composite fund composed of all of the largest companies on the S&P 500. This is diversification to the extreme and the objective is to allow you to invest in all of the major companies and industries in an economy, avoiding the risk that any particular one suffers or does poorly. There are even index funds that directly target starup companies. 

Warren Buffet, for example, has said that index funds are his best investment. This is because, over time, index funds consistently make investors returns that are above the market. These are not the kind of thing you buy and sell frequently to make short term speculative gains, but investments you hold for the long-term under the assumption that you can expect an above-market rate of return over the long haul. 

Mock Trading Account

A mock trading or brokerage account is a great way to ease yourself into the markets because they provide you with play money that you can invest in real-time without having to risk any of your capital. Most financial institutions and banks offer these mock accounts for investors to “play” with and get to know how the markets work, and how brokerage platforms function. 

Many come with tutorials and walkthrough, as well as breakdowns of key terminology. By consistently using these mock accounts, you become more familiar and comfortable with placing buy and sell orders, you learn to follow along with finance and investing-related conversations, and you get to track price movements in real-time, which helps demystify the market for novices. Whether you are investing in a startup or an established company, this sort of exposure is an important part of confident, comfortable investing. 

Mutual Funds

Mutual funds are one of the more common investment vehicles for first timers and they are likely what you will be recommended if you schedule an appointment to speak with an investment advisor at your bank. Mutual funds are “mutual” because they take your money, and the capital from hundreds or thousands of other investors, and use it to make purchases of stock, bonds and other financial instruments based on the type of fund it is. Some mutual funds allocate a cettain percentage of their portfolio to startup companies and ventures. 

Mutual funds are managed, meaning that there are investment professionals at the helm of these funds deciding how and where to invest the fund’s money. The thing to keep in mind with mutual funds, however, is that the management fees can end up having a significant impact on your returns. These fees get paid to the bank and to the fund managers regardless of whether the fund does well or not, so you can quickly find yourself in the red with mutual funds, wishing you had put your money elsewhere. 


Knowing where and how to invest your money as a first-time investor is half the battle, especially when getting into the startup space. There are so many investment opportunities out there, and so many people eager to take your money to help you make them, it can often feel like you are fish surrounded by sharks when you wade into the market for the first time, and in a sense, you are.

Many new investors start their investing careers in the wake of something like Bitcoin or Gamestop and are too foolhardy while testing the waters. Your best bet is to never invest what you can’t stand to lose and to start out by learning the markets, observing the professionals and looking for investment opportunities that either play it relatively safe, or that you have a lot of confidence in and understand the market. 

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By Sony T
Sony is a passionate bloggers writes on Futuristic technologies ...
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