SeedInvest sits down with Erica Minnihan, Managing Director at DreamIt Ventures, to discuss strategies for successful startup investing.

Any advice for first time startup investors?

Establish a Well Constructed Portfolio of Startups:

• Plan to invest in thirty to forty startups over the next five to ten years.
• Reserve some “dry powder” for follow-up investments with successful companies.
• Have a target IRR higher than 25% to compensate for unsuccessful investments.

“The people that make the most successful companies aren’t necessarily the people that come to you with the best idea in the beginning, but they’re the people who can pivot.”

Take Marketing Seriously:

• Only invest in startups that have a completely realized marketing strategy.
• Research a startups work ethic and prior accomplishments.
• Make sure the company can evolve according to market dynamics.

Invest in Startups with Strong Financial Models:

• Make sure their whole management team knows what they’re doing.
• Understand how a startup plans to drive growth.
• Analyze the company’s financial ability to change directions.

Erica Duignan Minnihan is a Managing Director for DreamIt Ventures focusing on Community Development in the New York City region.  DreamIt Ventures runs programs in Austin, Baltimore, New York City, Philadelphia and Tel Aviv. In the last 5 years, DreamIt has helped 127 companies and over 400 entrepreneurs turn their ideas into business.  She is also Managing Partner of seed-stage investment fund Fortuna Ventures, which invests in technology-enabled early stage companies.

Startup Investing 101 is a web series dedicated to educating investors about the world of startup investing.