📺 Stream EntrepreneurTV for Free 📺

How to Invest Your Hard-earned Money in the Right Project An entrepreneur needs to possess vigilance, as well as skill, so as to become a good entrepreneur-cum-investor

By BusinessEx Staff

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.


Administering an enterprise properly and then ensuring that profits are more than expenses, helps to keep an entrepreneur's status financially strong. Besides this, there are various other ways that an entrepreneur can deploy to earn an extra income apart from their business. Setting up a subsidiary business is one of the options but it will add more burden on the entrepreneur's shoulders as he would have to oversee two enterprises at the same time. However, there is another alternative that he can choose i.e., angel investment.

Angel investment is primarily a sum that an investor or entrepreneur offers to a company. The offered money helps the company to manage operations and expand its business. In exchange for funds, the investors receive a certain number of shares in the invested company. Besides this, the investors receive other benefits as well such as dividends, interest and so on.

How does Angel Investment Help to Earn More Income?

A transition from an entrepreneur to an investor is drastic. Primarily, an entrepreneur needs to possess vigilance, as well as skill, so as to become a good entrepreneur-cum-investor. Firstly, a business owner needs to understand the stock market and ascertain the key players in it. Then, the entrepreneur can gradually begin studying business models of prominent players in the business.

According to the States' Startup Ranking 2018, "Out of 30 Indian states that participated in State Startup ranking exercise, only 10 states have designed the incentives for angels to encourage their investments in startups. The many states have organised angel investment focused events but are yet to advance to a stage where direct or indirect financial support is provided to angel investors in the state. The incentives, if provided would facilitate the creation of angel group chapters in the state."

The above-cited figures show that there is a huge dearth of angel investors in the Indian market. This gap needs to be filled by the entrepreneurs by actively participating in funding rounds and mentorship.

  • Building a Strategy

It is important to build a layout of the investment portfolio as it will help to apprehend the amount of funding one can offer in the initial stage. Investment does not always guarantee positive ROI; sometimes, it can result in losses too. So, the entrepreneur needs to keep this in mind and accordingly manage his/her portfolio.

Citing the example of Ratan Tata, Chairman Emeritus of Tata Group, who has mostly invested in startup companies—Paytm, Ola Cabs, Ola Electric and First Cry, to name a few. So far, the veteran industrialist has made 19 angel investments, out of which 2 investments did not bear any returns. This shows investment scenarios are lopsided and it is difficult to accurately predict profit or loss. Thus, the investor should be prepared to face adversaries.

  • Choosing the Right Company

Profits, revenue and business backdrops don't help to accurately apprehend future trends of a company; nature of business is also of prime importance to examine a business's success rate. In today's business ecosystem, internet-related business, as well as tech firms, is on the rise and thus, the investors sow money in these companies for reaping higher benefits with minimum risk.

The e-commerce platform, Amazon, is one of the leading companies in the stock market. In the beginning, its potential was doubted and as a result, renowned investor Warren Buffett has not invested in the company for a long time. In a media report, he said that he always appreciated Jeff Bezos but did not invest in his company. Now, when Amazon's stocks are rising high, he realises that he missed the opportunity.

This shows that observing the market trend is yet another important criterion to make the right investment decisions.

This article was originally published by Jaspreet Kaur.

Side Hustle

These Coworkers-Turned-Friends Started a Side Hustle on Amazon — Now It's a 'Full Hustle' Earning Over $20 Million a Year: 'Jump in With Both Feet'

Achal Patel and Russell Gong met at a large consulting firm and "bonded over a shared vision to create a mission-led company."


Want to Be More Productive? Here's How Google Executives Structure Their Schedules

These five tactics from inside Google will help you focus and protect your time.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.


5 Ways Solopreneurs Can Scale Their Business Through Collaboration

Our culture loves to perpetuate the myth that entrepreneurs must go it alone. But for many, the path to success is found in collaboration.


I Quit! You Just Don't Know It Yet — How to Stop Disengagement and Ensure Your Employees Remain Vibrant and Productive

Disgruntled or disenchanted employees are giving up and doing the minimum at their jobs. Are people quiet quitting on you?


How to Harness the Power of Authentic Storytelling to Become a More Effective and Inspiring Leader

Storytelling enhances business leadership by inspiring a culture of authenticity and trust through sharing relevant personal stories.