If you have wondered what companies you should invest your money into, consider buying stock on two of some of these most quickly growing and adapting companies in our modern economy today. Knowing which companies to buy stock in can make a dramatic impact on your overall financial worth.
Contrary to popular belief, Venture Capital funding or Angel Investment is not a recent concept. Investors have always been excited by the thought of putting their money behind such ideas that would change the course of the world, and in turn, create historic fortunes for them as well.
In 1878, J.P. Morgan placed his bets on the vision of Thomas Edison who believed that his invention of Direct Current (DC) Electricity would transform the world forever. J.P. Morgan was the only one who got excited by Edison’s vision, and everyone else in the investment community found Edison’s work impractical and improbable.
He put in massive funds behind Edison to lay the foundation for the Edison Electric Company, which later became General Electric (GE). Edison earned fame, and J.P. Morgan grew richer beyond his own wildest dreams.
Not many people are aware of the twist in the tale of Thomas Edison’s invention. In 1884, Edison was approached by a young engineer, Nicholai Tesla, who believed that his idea of Alternating Current (AC) Electricity was superior to that of Edison’s DC.
Tesla believed AC was a relatively safer, less costly and more reliable source than DC. However, Edison and J.P. Morgan failed to see the real value of Tesla’s invention.
This is the greatest danger in any business or in any venture capital fund – the tendency to get emotionally attached to the idea, and as a result fail to see logic. Industrialist George Westinghouse was impressed with Tesla’s work, and created a capital fund to finance Tesla.
Thereafter, a great “power struggle” between Morgan and Westinghouse ensued who both wished to control the future of electricity in the world. The lesson here to be drawn for today’s VC funds is to be constantly on the edge when investing in technology.
It is important to go after new paradigms before anyone else does. It reminds one of Microsoft’s delayed foray into the world of Internet, and the phenomenal rise of Google.
Andy Bechtolsheim’s initial investment of one hundred thousand dollar in Google is now a well known part of “Google Lore.” In 1998, Stanford graduates Larry Page and Sergey Brin built a new online search engine technology but found no takers for it.
Everyone whom Larry and Sergey approached, including Yahoo! founder David Filo, did not believe that there could be a market for an online search engine. Andy Bechtolsheim, co-founder of Sun Microsystems got excited about the idea when Google was still in beta stage.
The rest, as they say, is history. Google found another angel investor, Ram Sriram, who believed in the idea of Google at a time when everyone else scoffed at the thought. Ram Sriram was ranked number three on Forbes’ 1995 list of “100 Venture Capitalists with a Midas Touch” and at that time he was said to own over five million shares of Google for his initial investment of a few hundred thousand dollars.
Both Google and Electricity have been probably the most disruptive technologies that have changed the way the world functions. Both technologies still continue to evolve and shatter their own past paradigms to create new ones.
The new crop of venture capital investors can continue to draw inspiration from such stellar examples till the next big angel investments of the 21st century emerge out of nowhere and change the world all over again. Who knows, maybe it could be you?
The point is, it is wise to take risks, if you calculate what you have to lose, and what you have to gain if things work out. As long as you do the proper amount of research to be sure that you are investing in a legitimate possibility for the future, why not take a risk and see what reward can be reaped?
There is something to the saying “no pain, no gain.” If you are not willing to invest in something that is young, exciting, and risky, you will not have the opportunity to gain the same level of wealth as those who have risked all before you did. BOLA TANGKAS