July 31, 2014 12:00 am | Author: investright

Some investors have
done very well investing in start-up businesses in the private placement market.
This is because these investors have done their homework and learned that the
company has a good business plan, excellent management and a product that
produces profit.

Nevertheless,
start-up companies can be risky investments because they are new to the market
or sector, have limited disclosure obligations, and investors can have
difficulty selling their shares in the business.

The failure rate of
start-up businesses is also high in comparison to established businesses with a
history of successful operations. Business failure may be the result of a poor
business plan or economic factors beyond the business owners’ control. Whatever
the cause, a failed business is unlikely to return your capital, let alone give
you a return.

Before investing in
a start-up or any higher-risk venture, you will want to understand your risk
profile and if the investment fits into your financial goals.

Start by asking
yourself questions like:

  • How much money do I have
    to invest now?
  • How much money am I
    willing to put at risk?
  • Does this investment fit
    into my overall investment plan?

Our website can help you to assess your risk tolerance
and determine your
investment plan
. Furthermore, the website has information on what to consider before taking
the plunge and investing in a start-up. Check out our Guide
and video on the private placement market
.

If you have concerns
regarding investing in a start-up, please contact BCSC inquiries at
1-800-373-6393 or inquiries@bcsc.bc.ca.



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