Safely Prosperous or Really Rich: Choosing Your Personal Financial Heaven

Chapter 18

Getting Rich by Investing in Start-ups

If you don't want to go through the trouble and worry of becoming a capitalist yourself, there are ways to invest in those who do. Most start-ups fail, but you can separate the sheep from the goats. I will show you how and when to jump in, and when to run like hell.

Investing in start-ups is one path to real wealth. The problem is that if you don't know how to sort out the sheep from the goats, it can be a freeway to the poorhouse. It's usually an all-or-nothing proposition: You either make a lot of money or lose your whole investment. Capital investing has serious risks, but if you know what you're doing, they are acceptable calculated risks.

Wouldn't you like to have been one of the hundreds of millionaires created by Microsoft? Sure, Microsoft is one in a million, but there are little Microsofts being created every day. Other than starting your own business, investing in start-ups has more upside potential than any other get-rich strategy. It can be as much a part of your get-rich plan as the stock market or real estate, but only if you do it right—and because there are a zillion ways to do it wrong, they can all make you poor if you don't know what you're doing.

Where did I learn this stuff? First, I have watched hundreds of start-ups and invested in some of them, including some losers. Second, I have started several new business ventures myself; some were winners, some were losers. Much of what I know about the subject I ...