In this thought-provoking episode of Everyday Money Matters, Host Olusegun Akin Olugbenjo is joined by the Founder of Money Wit Club, Oler Oladele, to discuss everything you need to know about investing in startups, the potential, and the risks.
Oler Oladele starts off by defining investing in a startup as the act of putting money into a young company with the expectation of a return and emphasized that if there is no expectation of return, the money is considered a gift or a grant rather than an investment.
She further clarifies that start-up investment can be structured as equity (becoming a part-owner) or debt (a loan with agreed-upon repayment terms), depending on the specific offer.
Additionally, Oladele notes that startup investing can involve modest amounts and everyday enterprises. For illustration, she mentions contributing 50,000 to 100,000 Naira to help a thriving street food vendor expand to a new location as an example of startup investment.
However, Oler advises investors to invest in startup companies they can only afford and recommends keeping investments to no more than 10% of their total earnings, which should be spread across multiple startups.
To wrap up, Oler Oladele highlighted the need for disciplined investing through thorough due diligence and prioritizing written, lawyer-reviewed contracts to protect investments to avoid costly mistakes.
Watch the latest episode of Everyday Money Matters to learn how to invest wisely in startups, manage risks, and make smarter money decisions.
