Venture capital (VC) is a tough industry.
High-growth startups can be risky because they often rely on lots of VC money to fund their growth. Once the money runs out, they either need to be profitable, raise more, or go bankrupt because they expanded too fast and can’t support the prohibitively high costs they incurred in their expansion.
Why It Matters: Previously, it was illegal for retail investors to invest alongside VCs like Martin Tobias. Now, anyone can do it, and investing in the right startups can result in significant gains if an exit happens.
Startups have a high failure rate, so many funds and startup investors rely on the small number that exit successfully to make up for those that fail.
Getting a few big startups right can make a portfolio and turn you into a big name in the startup investing world that others follow. One such person is Martin Tobias.
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Tobias has been a venture capitalist for several decades. He founded MGT Investments LLC, Incisive Ventures, Element 8 Angels and launched various startups. He invested in the earliest stages of Alphabet Inc’s Google, DocuSign Inc, OpenSea and over a dozen other unicorns — startups turned billion-dollar companies before they were the massive names you see today.
Tobias invested in DocuSign in 2003, the year it was founded, but the company didn’t launch its initial public offering (IPO) until 2018.
Now, Tobias has his sights set on another startup, and anyone can invest alongside him for a limited time. That startup is Sensate, the maker of a ‘genius’ device that reduces stress for its users. The company has raised over $1.9 million from everyday investors on Wefunder and $160,000 from Tobias himself.
Tobias gives Sensate high praise on the company’s raise page, calling its device life-changing. The device has become part of his family’s daily routine.
Tobias said that whenever he finds a product that changes lives, he contacts the company’s CEO to ask whether it is raising money, which is how he became an investor in Sensate.
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