Thus far, 2022 has been a tough year for the economy and financial markets. The lingering Covid-19 pandemic, the Ukraine crisis, and other unsettling world events have rendered actions like investing in tech companies tricky and challenging. However, prominent Tampa Bay-based entrepreneur and venture capitalist Marc Blumenthal believes prospective investors can find success in such endeavors.
Blumenthal is a General Partner at Florida Funders. Since 2015, he and the company's leaders, including the host of this podcast Tom Wallace, have been driven by the mission to invest in extraordinary founders and help them build the next generation of breakout technology companies backed by an ever-growing network of passionate investors.
Blumenthal is a serial tech entrepreneur, investor and community builder. In this episode, he and Wallace talk about the state of early stage investing and their experiences across the years during both the upturns and downturns of the public markets.
Can You Succeed In Angel Investing During An Economic Downturn?
Many might think such a potentially risky undertaking is difficult or even impossible during times of economic distress. Blumenthal stresses that this assertion is not necessarily correct. He also emphasizes prospective investors strategies such as:
1. Examining The Big Picture
Angel investors need to realize that the practice is undertaken with designs on future outcomes. In all likelihood, investments made in early tech startups will not yield measurable profits until long after the current economic downturn has shifted.
2. Focusing On Fundamentals
During times of economic turmoil, astute startup executives focus on fundamentals. Doing so enables their companies to avoid waste and costly mistakes. Investors can yield favorable results during times of financial hardship, but must place significant importance on founders who are sticking with the key basics such as hiring the best talent, defining the company's current and future goals, and establishing a solid model of future projections and expectations.
3. Seizing The Opportunity
Blumenthal cautions that many companies fail during economic downturns because investors believe such occasions are not conducive to success. These occasions often present golden opportunities providing would-be investors read the market carefully and invest in entities offering value-based goods or products.
Investors are firmly encouraged to diversify their early stage investment portfolio. This means investing in several startups and not placing extensive focus on only one or two companies.
5. Staying Positive
Blumenthal also stresses the importance of staying positive. Angel investing can prove challenging during the best of times. Successful venture capitalists do not allow themselves to grow deterred by struggles or unexpected snags. Maintaining an upbeat outlook and not letting emotion guide decision making are valuable for investing, especially in difficult times.