Follow These (Profit) Leaders

By Wayne Mulligan, on Thursday, November 10, 2016

When it comes to finding the most profitable early-stage investments, you’ve really got your work cut out for you.

As I explained last week it’s been shown that you need to do at least 40 hours of research on every investment—whether you decide to invest or not.

But as Matt revealed yesterday, there are ways to quickly and easily increase your odds of picking a winner.

Today I’ll show you three more of these “short-cuts” to finding profitable deals.

Actually, these strategies may seem familiar to you…

They all involve a game you probably played as a kid.

Follow the Leader

When I was growing up, my friends and I played a lot of “Follow the leader.”

You’re probably familiar with this game. Basically, you had to mimic everything the leader did. And the only way to win was to copy their every move.

Well, as it turns out, something similar exists in the world of early-stage investing:

To start, you identify some “leaders”—in other words, some successful early-stage investors. Then you aim to invest in the same start-ups that they invest in.

But there isn’t just one leader to follow in this game—there are three…

Profit Leader #1 — “Insiders”

The first type of leader to follow is an “insider”—in other words, an investor with significant experience in a specific industry.

You see, according to a prominent study, investors who had significant experience in the industry they were investing in (specifically, at least 14 years of experience) earned double the returns of those with no industry experience.

An insider might be a professional who’s worked in an industry, or even the investment arm of a company in the sector.

For example, we recently invested in a medical device start-up that was being financially backed by the drug giant, Eli Lilly.

Given Lilly’s deep expertise in this start-up’s market, we felt confident investing alongside them.

There are also opportunities to follow government insiders.

You see, many branches of the government have their own investment funds. The Department of Defense has DARPA, the CIA has In-Q-Tel, etc. And to see the companies and sectors they’re investing in, you just need to visit their websites.

By following insiders, you can reduce the amount of time you spend on research, and you can increase your chances of earning above-average returns.

Profit Leader #2 — “The Pros”

The second type of leader to follow is a professional early-stage investor.

These professionals are known as Venture Capitalists, or VCs for short.

VCs spend their days meeting with dozens of entrepreneurs and reviewing hundreds of business plans. And they’re highly selective about who they invest in.

In fact, the best VCs invest in less than 1% of the companies they see.

The reason VCs are willing to do so much work and research is because the only way they can earn a major payday is to pick profitable investments.

So the next time you’re evaluating an early-stage deal, see if a VC has already invested…

As studies have shown, companies backed by VCs are 66% more likely to succeed than non-VC backed companies.

Profit Leader #3 — Independent Analysts

Unfortunately, there’s a problem with trying to follow insiders and VCs:

You might not be able to!

You see, these investors don’t make a habit of announcing that they’re about to make an investment. Generally, you won’t know they’ve invested until after the fact.

And by that point, it might be too late to get involved.

Fortunately, however, there’s another type of leader that can help you get you the returns you’re after—

A leader that will do all the hard work for you and tell you exactly when to invest.

I’m referring to independent investment analysts.

In the public markets, these are many types of these analysts—from research firms, to media companies like CNBC and Bloomberg, to newsletter publishers like and Motley Fool.

These entities help guide individual investors like you on where to put your money.

In the private markets, however, few entities like that exist…

Except for Crowdablity, that is.

Crowdability is one of the world’s only independent analysts for private, early-stage investments—and it’s also the world’s largest.

We do all the hard work and research for you, from digging through funding documents and SEC filings, to interviewing company founders and their competitors.

We’re here to help individuals like you make profitable investment decisions.

Save Time, Make More Money

But to be clear, we only provide our deepest research to members of our premium services, CrowdablityIQ and Private Market Profits.

Although we enjoy providing our free readers with education and advice, we need to be fair to our paid members—so we save our most in-depth analysis and official recommendations for them.

We know that some of you have tried to subscribe to Private Market Profits, our most elite service, and have been turned away. We apologize for that, but up until now, we’ve kept a strict cap on the size of our membership.

If you're already a Private Market Profits member then there's nothing for you to do here.

However, if you haven't done so already, join the wait list for this service here »

Happy investing.

Best Regards,
Wayne Mulligan
Wayne Mulligan


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Tags: Early-stage Investing

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