Startup investing is tricky business, but people who invest in the right companies can see incredible results.
While most public hedge funds and similar entities target a 7% to 10% return, seed and series A funds target anywhere from a 10% to 35% yearly return. This is because they typically rely on a few companies to give massive returns that make up for the majority of a portfolio’s return, and one good exit can give a massive return.
For example, If you invest in 10 startups, and one gives a 5,000% return and then goes public after five years but the rest go bankrupt, that means you’re sitting at a 37% yearly return. This is generally the idea behind much startup investing.
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One startup that’s drawing a lot of attention in several markets is Sensate, a company that claims to have a revolutionary relaxation device. Not only has it raised hundreds of thousands from institutional investors, but Sensate is also nearing $2 million raised in its current equity crowdfunding raise. The startup is open for anyone to invest in for a limited time.
Most notably, it’s attracted notable angel investor Martin Tobias. Tobias has invested in some of the biggest names in tech, including as an early-stage investor in Alphabet Inc.’s Google, OpenSea, DocuSign Inc and many others.
It has at least three institutional investors, like venture capital or accelerators on its cap table as well. Those include TenOneTen Ventures, Unlock Venture Partners and Expert Dojo. Expert Dojo, for example, invests $100,00 in each of the startups that go through its program and is one of the most active international early-stage startup accelerators in Southern California.
It makes sense that Sensate has been successful in attracting investors. The startup is sitting at $2.8 million in revenue in 2021 — a 363% increase over its 2020 revenue.
While the startup has substantial traction, startup investments are speculative and illiquid so it’s important to do independent due diligence.
See more on startup investing from Benzinga.
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