With hundreds of startups being launched every day, new doors of opportunities open for investors to expand their portfolio and contribute to an entrepreneur’s success. But, investing in a startup is not risk free and what looks good in the pitch may not be that pleasant in the real world scenario. That’s the reason investors conduct due diligence before investing in an idea.
The most important factor any investor considers while investing in a startup is the return on investment, but the calculations are not easy. It needs parallel time and effort to find how much money a startup can make and it’s nearly impossible for an investor to do lengthy calculations for each startup that comes around.
Startup Return Calculator by 1000 Angels is an efficient and time saving tool for all those busy people. Entrepreneurs are asked few simple questions and the answers collectively calculate the return over time. The calculated return can be presented to the investors with confidence. Investors can rely on the calculations as tool analyzes both the potential IRR and cash on cash return.
Investors can compare different startup investment opportunities by analyzing the risk and return potential of prospective investments.
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The Startup Return Calculator is based on a proprietary calculation method used to estimate cash on cash return and IRR and the calculations are 100% accurate, but the validity of the results is based on the accuracy and reasonableness of your inputs.
Every startup must use the calculator to understand how valuations and dilution from follow on capital requirement can affect the expected return of their investments. Remember that there are various factors that investors take into consideration while making an investment, this tool just provides you with a better way to present your startup financials.
On the other hand, investors must use the tool to do due diligence more efficiently.