With the industrialization and absorption of technology, digital currencies are gaining much importance of late. Bitcoin is undoubtedly one of the most popular digital currencies because it was the first-ever cryptocurrency that was discovered in 2009, by the pseudonymous developer Satoshi Nakamoto. Therefore, the people who are aware of cryptocurrencies and their concepts are well-versed with bitcoins at least.
The global cryptocurrency industry was last estimated towards the end of 2021 at $910.3 million and is expected to grow at a CAGR of 11.1% to $1902.5 million in 2028. Though we are still devoid of the exact data, the total cryptocurrency investors in India range between 15-20 million, where the total crypto holdings were estimated at 400 billion rupees ($5.37 billion).
Though the cryptocurrencies or the income drawn by the Indians from the same were not taxed earlier, in a recent move to bring the cryptocurrencies and non-fungible tokens (NFTs) under the tax bracket, the Indian Finance Minister Nirmala Sitharaman announced a 30% tax on the income from the transfer of virtual digital assets on February 1, 2022, Tuesday. Sitharaman further specified that no deductions and/or exemptions would be allowed here. The crypto tax, being proposed at 30%, is the highest tax band that has been introduced in the country so far. This crypto tax news is also happily welcomed by the crypto industry, founders and entrepreneurs alike. The chiefs of 3 major organizations – WazirX, CoinDCX, and ASQI responded cheerfully to the news as soon as it was disclosed by the Indian government, happy at the progressive stance the government is taking.
In this article, we will talk about the significant advantages and disadvantages of Cryptocurrencies.
A cryptocurrency is a type of virtual currency that uses digital files as money. Normally, the files are designed using the same methods as cryptography. Cryptocurrencies use ‘decentralized control’, which means that they aren’t managed by the government or one person.
Types of Cryptocurrency
There are many different types of cryptocurrency in the market that are taking the world by storm. Some well-known currencies are:
Bitcoin (BTC)
Bitcoin is the most popular cryptocurrency out there and its development is the inspiration and result of the development of other cryptocurrencies. It was founded in the year 2009 by Satoshi Nakamoto, whose identity is revealed. The current value of bitcoin is INR 1514136.15
Litecoin (LTC)
Litecoin was developed in the year 2011. The creator was Charles Lee, who was a former Google engineer. The current market value of Litecoin is INR 3934.91. It is quite similar to bitcoin and is popular as well.
Ethereum
Ethereum was founded by programmer Vitalik Buterin in 2013, he is also the co-founder of Bitcoin Magazine. The current market value of Ethereum is INR 83896.38.
Zcash (ZEC)
Zcash, another form of cryptocurrency was founded by Zooko Wilcox-O’Hearn. This crypto was developed and released in the year 2016. The current market value of Zcash is INRT 4716.53.
Stellar Lumen was created by Jed McCaleb in 2014, who is an American programmer and entrepreneur. as it is cheap it is said to be good for investment. The current market value of Stellar Lumen is INR 8.4.
Cardano
Another cryptocurrency that is taking over the world is Cardano. It was developed by Charles Hoskinson, who is also the co-founder of Ethereum. The current value of Cardano is INR 35.31.
Cons of Cryptocurrency
People are getting more and more obsessed with cryptocurrency. Here are some advantages of Cryptocurrency investments:
Protection from Inflation
It’s one of the great advantages of cryptocurrency as inflation has caused multiple currencies to make their value decline over time. Nearly everycryptocurrency, at the time of its launch, is issued with a set amount. The source code defines the amount of any coin; like, there are only 21 million Bitcoins released in the world. So, as the demand increases, its value will rise, which will keep up with the market and, in the long run, restrain inflation.
Instant and 24 Hour Accessibility
It is possible that you can spend or purchase anywhere you are, and you do not even require a system to use it. Everything can be done from your mobile device, implying that even those with limited usage of technology are still able to make their investments and make decisions in real-time. This convenience is a fundamental feature for the selection and buying of bitcoin and it is being used all over the world to give opportunities for those who would earlier have struggled to become online customers.
Self Governed and Managed
Governance and preservation of any currency are determinants for its development. The cryptocurrency transactions are collected by miners on their hardware, and they get a transaction charge as a reward for doing so. Since the miners are getting paid for it, they keep transaction records precise and updated, maintaining the honesty of the cryptocurrency and the records decentralized.
Secure and Private
Privacy and security have always been a primary concern for cryptocurrencies. The blockchain record is based on many numerical puzzles, which are difficult to decode. This makes a cryptocurrency extra secure than conventional electronic transactions. Cryptocurrencies, for better safety and privacy, use pseudonyms that are unconnected to users, accounts, or saved data that could be connected to a profile.
Ease in Currency Exchange
Cryptocurrency can be obtained using multiple currencies like the US dollar, European euro, British pound, Indian rupee, or Japanese yen. With the help of different cryptocurrency pocketbooks and exchanges, a currency can be converted into another by trading in cryptocurrency, with minimal transaction fees.
Decentralized
A significant advantage of cryptocurrency is its decentralization. The majority of cryptocurrencies are regulated by the developers using them, and the individuals who have a notable amount of the coin. The decentralization assists keep the currency monopoly free and in check so that no organization can ascertain the movement and the value of the coin, which, in turn, will keep it stable and secure, unlike currencies that are controlled by the government.
Cost-Effective Mode Of Transaction
One of the important applications of cryptocurrencies is to transfer money across borders. With the help of cryptocurrency, the transaction expenses handled by a user are decreased to a negligible amount. It does so by eradicating the necessity for third parties, like VISA or PayPal, to approve a transaction. Transactions, whether foreign or national in cryptocurrencies, are lightning-fast. This is because the verification requires very little time, as there are very few hurdles to pass.
Cons of Cryptocurrency
There are many reasons cryptocurrencies are still facing the heat from people. Some of the disadvantages of cryptocurrency investment are:
Used for Illegal Transactions
Since the privacy and security of cryptocurrency transactions are stable, it is difficult for the government to track down each user by their wallet address or keep checks on their data. Bitcoin has been used as a mode of exchanging money for a lot of illegal contracts in history, such as acquiring drugs on the dark web. Cryptocurrencies are also used by some to convert their illegal money through a trustworthy mediator to mask its origin.
No Security in Case of Loss
As with emerging technology, some use incompetence to scam, trick and steal your hard-earned bucks. This has proven to be the problem with digital currencies, so it is necessary to be informed of the security risks. With a few primary security, one can decrease the possibility of causing a loss that cannot be restored.
Conversion of Cryptocurrencies
Some cryptocurrencies can only be patronized in one or a few fiat currencies. This limits the user to convert these currencies into one of the major currencies, like Ethereum or Bitcoin, then through other exchanges, to their wanted coin. By doing so, the additional transaction fees are added in the process, requiring unnecessary money.
Adverse Effects of Mining on the Environment
Mining cryptocurrencies requires a lot of power and electricity, making it extremely energy-intensive. The greatest culprit in this is Bitcoin. Mining Bitcoin requires advanced computers and enormous energy. It cannot be done on regular computers.
No Refund or Cancellation Policy
If there occurs a dispute between involving parties, or if a person wrongly transfers funds to the wallet address, they cannot be recovered by the sender. As there are no rebates, one can generate a transaction whose product or services they never received.
Prone to Market Fluctuations
There are numerous ways that one can use cryptocurrencies, but a lot of people utilizing them at the moment are solely using them as an investment. While eager users are using their digital money to purchase tickets to sporting events, gamble online, or wait for the market fluctuations to work in their favour. Treating your bitcoins as any other commodity may be the way to initiate a more widespread understanding and trust in the new currencies.
Conclusion
With recent developmental and rules regarding cryptocurrency in every country. People are getting more and more interested in them. Of course, there are cons of cryptocurrencies that make people question themselves before indulging in them. However, with technology taking over the world, people cannot deny the pros of cryptocurrencies. It is just a matter of time before cryptocurrency will take over the world.
FAQs
What are the advantages of Cryptocurrency?
The advantages of Cryptocurrency are that it is decentralized in nature, it is not affected by inflation, and transferring money across borders is easy.
What are the disadvantages of Cryptocurrency?
Some of the disadvantages of cryptocurrency are, It is used for money laundering, it is highly volatile and it has high-security risks.
Is it good to invest in Cryptocurrency?
Investing in crypto can be profitable but it is risky too, as it is a highly volatile currency and is prone to market fluctuations.
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The modern industries of the world are transforming each day with the addition of new companies or startups and their disruptive ideas. Though the increasing competition is certainly bringing forth the best products at equally appreciable rates for the customers of now, it is excessively detrimental for the companies, especially startups to hold on to the fast-paced environment and cement their position in their respective spaces. Thus, many startups often lose control and end up being forgotten. Experience is what most of them lack most often and here’s why nowadays we find companies and veterans teaming up to upscale the startups.
It was Thrasio Holdings, Inc., which had made this idea possible in the US, scaling over 150 brands to date. This Thrasio-style has become really popular indeed ever since Thrasio began to be a huge success. GlobalBees is one such company that believes in the upscaling of other companies in India and is making it possible in India.
GlobalBees invests in a wide range of companies across domains like e-commerce, consumer technology, marketing and operations, and more, with a special focus on the sellers of the popular eCommerce platforms like Amazon and Flipkart to improve their sales and help them grow. The company is a Thrasio venture-style arm of FirstCry is already a unicorn in less than 8 months of operation!
If you want to know more about GlobalBees, its Business Model, Revenue Model, Funding and Investors, Startup Story, Acquisitions, Challenges, Competitors, and more, then read ahead.
GlobalBees is a startup that focuses on identifying and scaling amazing products. Since it was founded in 2021, GlobalBees has created a varied portfolio of firms in sectors including beauty, home care, personal care, nutrition and wellness, fashion jewellery, and eyewear.
Globalbees Brands Private Limited is a Non-Government Company that is listed in the company class. This company is registered with the Registrar of Companies (ROC) in Delhi with a paid-up capital of Rs. 7 lakh and authorized share capital of Rs. 7 lakh.
The startup purchases up-and-coming companies across niches. It aims to upscale merchants from an array of sectors such as fashion, home and kitchen, electronics, cosmetics, personal care, sports, and others. Globalbees works with entrepreneurs that have developed an internet-based business. The company’s staff grows direct-to-consumer (D2C) enterprises in India and beyond. Companies that have produced goods based on unique customer intelligence are favoured by the company.
GlobalBees assists businesses with scaling and revenue development once they have been acquired by the company. The New Delhi-based unicorn works with the merchants, especially with those who are on the e-commerce platforms like Flipkart and Amazon, the business uses smart marketing methods and other technologies to help these firms flourish. Not only that, but the corporation also starts the worldwide operations of these brands.
GlobalBees founder Nitin Agarwal stated in an interview that the company has already cooperated with 12+ digital businesses. These companies are selling their goods and services in domestic and international markets.
How GlobalBees Acquires Digital Brands?
GlobalBees works in a step-by-step way to acquire or collaborate with the brands. The GlobalBees team begins by gathering knowledge about the digital brand that it will purchase. The startup does this by looking at the revenue numbers and the items that the brand sells. For long-term success, the firm also learns how to establish a brand relationship with customers.
Following the completion of the first stage, the GlobalBees team prepares a contractual agreement with the founders, outlining all payout terms and circumstances.
Next, GlobalBees brings in its expertise and cutting-edge tools and technologies to expand the acquired brands. GlobalBees has a team of professionals who work directly with digital companies to help them flourish.
By acquiring more than 10 companies and becoming a unicorn in such a short span of time, GlobalBees has caused quite a stir in the Indian startup environment.
GlobalBees – Industry
The Thrasio model, pioneered by the US-based Thrasio Holdings has been insanely popular around the world and in India too following the brand’s success, which recently boasted of having a portfolio of over 100 brands and picking up a profit of $100 million on revenue of $500 million. The business model that replicates Thrasio was not quite explored before the Indian startups like Mensa Brands, 10Club, GOAT Brand Labs and GlobalBees started to foray into the same.
It was Amazon, which alone revealed in 2020 that as many as 4,152 sellers on its Indian marketplace have managed to cross Rs 1 crore in sales, which increased by 29% from the figures revealed in the previous year. This indicates the untapped opportunity in this space. The Indian brands like Upscalio, Evenflow, Powerhouse91, and the ones mentioned above have already started to take the pace and have together raised over $300 million so far.
GlobalBees – Name, Logo, and Tagline
GlobalBees assists emerging businesses in scaling and selling to marketplaces and other outlets in India and beyond the South Asian market, hence the name “Global-Bees”.
GlobalBees is founded by Deepak Khetan, Supam Maheshwari, and Nitin Agarwal in 2021.
Deepak Khetan
GlobalBees’ Chief Financial Officer (CFO) and Head of Corporate Development, Deepak Khetan is an alumnus of the Institute of Chartered Accountants of India, who also attained the CFA Institute and GARP, USA. Deepak is an experienced financial executive with over 18 years of experience in advising, credit, strategy, and accounting activities, and backed strong academic qualifications.
He has vast experience in mergers and acquisitions, strategic advising, capital raising, and restructuring transactions, as well as cross-border circumstances. Khetan has previously served as a Manager and Chief Manager at ICICI Bank; Group EVP – Investment Banking at YES Bank; Chief Strategy Officer at Smaaash Entertainment and as the CFO and SVP at Edelweiss Financial Services before co-founding GlobalBees.
Deepak Khetan, GlobalBees Founder
Supam Maheshwari
The CEO and Co-founder of FirstCry, Supam Maheshwari is a Co-founder of GlobalBees. A Mechanical engineer from the Delhi College of Engineering and an alumnus of IIM Ahmedabad, Supam had earlier co-founded Firstcry and Brainvisa Technologies.
Supam Maheshwari, GlobalBees Founder
Nitin Agarwal
GlobalBees’ Chief Executive Officer (CEO) is Nitin Agarwal. Nitin Agarwal obtained his Btech degree from IIT Delhi and has worked in a series of companies including Citibank, where he served as an Assistant Manager; Equirus Capital, where he served as the Director; Incred, where he was the Chief Operations Officer; Wecash, where he was the Chief Operating Officer and Edelweiss, where Agarwal served as the President and Group CIO, CTO and Chief Digital Officer. Nitin also co-founded Brainvisa, Bigshoebazaar India Pvt Ltd, and GlobalBees till now in his entrepreneurial career.
Nitin Agarwal, GlobalBees Founder-CEO
GlobalBees has an employee strength of 100+ employees.
GlobalBees’ mission statement says, “Investing in and nurturing brands to provide joyful product experiences to the world.”
According to the company, its growth drivers are:-
Innovation – The demands of customers are always changing. It seeks out novel solutions to meet the demands of customers and improve all parts of the customer experience.
Inspiration – The company is inspired by others. The team continually listens to our customers and is ever-changing to meet their needs. This enables them to develop amazing things even under the most difficult of circumstances.
Impact – Products can have a beneficial influence on people’s lives. The team collaborates with entrepreneurs to develop goods that serve both customers and society.
The Thrasio-style business model is a relatively new concept in India, but it has garnered positive feedback from the country’s startup community.
GlobalBees acquires and works with innovative digital companies working in areas such as grooming, personal care, home care and kitchen, food and nutrition, and sports and leisure. The New Delhi-based startup then assists these businesses in scaling and selling to marketplaces (such as Amazon and Flipkart) as well as other channels in India and beyond. GlobalBees has already purchased or collaborated with nearly a dozen businesses that they are selling both in India and beyond.
“We have created and engaged with brands in the past and realized that most of these brands reach a scale after which it becomes too difficult to scale them,” Agarwal said. “Supam and I have been talking about this for several years, trying to find ways to disrupt this market. We think there’s an opportunity to create a new house of brands that is digital-native.”
GlobalBees, according to Agarwal, will try to construct a distribution and enterprise ecosystem in the internet realm in the same way that conventional enterprises have done so in the offline world. GlobalBees plans to invest in roughly 30-35 companies spanning from various D2C categories to fast-moving consumer goods (FMCG) and more, following the strategy popularised by US-based Thrasio.
“Not all brands GlobalBees engages with will get acquired on day one”, Agarwal said.
GlobalBees isn’t the first company in India to use the Thrasio concept. Other well-known firms that have used the Thrasio strategy to acquire digital brands include Powerhouse91, Mensa Brands, 10club, and UpScale.
GlobalBees – Funding and Investors
GlobalBees has raised $301.8 million over five rounds of funding.
Date
Round
Amount
Lead Investors
Feb 6, 2024
Debt Financing
$18M
Avendus Capital
Dec 28, 2021
Debt Financing
$30M
Trifecta Capital Advisors
Dec 28, 2021
Series B
$110M
Premji Invest
Jul 18, 2021
Series A
$75.88M
FirstCry
Jul 18, 2021
Debt Financing
$75.88M
–
GlobalBees – Investments
GlobalBees had invested in one company on April 23, 2022, which was its maiden investment worth April 23, 2022, until it invested again in 5 companies, as of June 13, 2022 reports. The FirstCry arm has invested recently in HealthVit and Top Gummy, nutrition brands. Furthermore, it also invested in personal care brands UrbanGabru and Urban Yog, followed by another investment in a lifestyle brand named Kuber Industries. Though the funding rounds and the investment amounts have not yet been confirmed, reports mentioned that the company has invested up to Rs 50 crore in each of the brands.
Date
Name of the Company
Funding Round
Deal Value
Lead Investor
June 13, 2022
Kuber Industries
–
–
June 13, 2022
Urban Yog
–
–
June 13, 2022
UrbanGabru
–
June 13, 2022
Top Gummy
–
–
June 13, 2022
HealthVit
–
–
April 23, 2022
Candes
Corporate Round
$3.2 mn
Yes
GlobalBees – Acquisitions
GlobalBees last acquired Reach on February 9, 2022, which is a sports equipment brand. Reach is the 2nd brand in the sports and fitness that the Thrasi-styled brand acquired.
Among its other investments, GlobalBees had invested in had acquired a controlling share in Healthyhey (a dietary supplement company), Rey Naturals (a hair care product company), and Intellilens (an eyeglass company) in November 2021. It also invested in Yellow Chimes, a prominent fashion jewellery brand, and Absorbia, an innovative home care brand to possess majority stakes in them, which were added to GlobalBees’ portfolio in the same month.
Prolixr, a local millennial skincare business, &ME, and The Better Home, a women’s health solutions firm are some other brands that have been earlier acquired by GlobalBees, all of which are covered in the “Acquisitions” section below.
GlobalBees plans to invest in roughly 30-35 companies spanning from various D2C categories to fast-moving consumer goods (FMCG) and more, following the strategy popularised by US-based Thrasio. The organization is excited about the prospect of purchasing and combining companies, as well as assisting them in scaling and transforming their digital presence. Within this financial year, GlobalBees plans to invest in over 20 brands.
GlobalBees acquired 11 brands to date. Here’s a list of its acquisitions below:
Date
Acquiree Name
About Acquiree
Amount
February 9, 2022
Reach
Fitness equipment company from Gurgaon, which rents out equipment and promotes fitness
–
Jan 11, 2021
The Butternut Company
Healthy snack food brand
–
Jan 11, 2021
Mush
Premium brand that is aimed to design and develop high-quality bamboo textile products
–
Jan 11, 2021
Strauss
Premium quality gym and fitness equipment company
Nov 23, 2021
Rey Naturals
Therapeutic Grade essential oils.
–
Nov 23, 2021
HealthyHey
The company create nutritional and health products for overall fitness and well-being.
–
Nov 2, 2021
Yellow Chimes
Yellow Chimes is a fashion jewellery brand.
–
Nov 2, 2021
Absorbia
Absorbia is an innovative product that keeps your belongings damp-free.
–
Oct 25, 2021
Prolixr
Prolixr embodies the perfect balance of formula savvy and playfulness to inspire a love for skincare.
–
Oct 4, 2021
&ME
&Me is a lifestyle nutrition brand creating bioactive beverages for women.
–
Aug 31, 2021
The Better Home
The Better Home is a home care products company, as it builds its portfolio of digital-first brands and helps them scale.
–
GlobalBees – Growth
As the need for online D2C brands grows, GlobalBees is taking up the challenge pretty well. It has been the second Thrasio-style firm to become a unicorn in 2021, following Mensa Brands.
In just seven months, GlobalBees built a wide portfolio of firms in sectors such as home care, beauty, and personal care, nutrition and wellness, fashion jewellery, and eyewear. Over the next three years, GlobalBees expects to invest in over 100 brands across sectors, including fast-moving consumer goods (FMCG), sports, home organization, and leisure.
GlobalBees boasts of a presence across 600+ cities. The company has hit a monthly revenue of Rs 1 crore in October 2020, within just nine months after launch.
The firm, which has offices in Delhi and Bangalore, has established assets and skills in marketing, technology, supply chain and logistics, product innovation, and other areas.
GlobalBees – Competitors
The market for Thrasio-style startups has grown rapidly and GlobalBees has also picked up numerous competitors like:
The funding that the company received will be used to expand the firm’s product range and accelerate the innovation process, customer experience, talent recruiting, and corporate growth, according to the founder of the company.
Globalbees has grown to over 100 members. In addition, the firm is in advanced conversations with over 20 organizations to expand its digital-first brand portfolio.
Speaking on the development, Nitin Agarwal, GlobalBees CEO said, “We have a deep purpose to build meaningful products across industries that address unique consumer needs. With this investment, we are well setup to become India’s largest brand platform. We are an august company of exceptional founders who have built great companies online. With this infusion of capital, we can work together to take these companies global.”
The company aims to reach $1 billion in revenue by 2026 and turn into a profitable startup.
FAQs
What does GlobalBees do?
GlobalBees invests in potential merchants on e-commerce platforms like Flipkart, Amazon, and Myntra, and works with their founders to improve their sales. These businesses can help businesses separate from the crowd of e-tailers by providing marketing skills.
Who founded GlobalBees?
GlobalBees is founded by Deepak Khetan, Supam Maheshwari, and Nitin Agarwal.
When was GlobalBees founded?
GlobalBees was founded in May 2021.
Which companies do GlobalBees compete with?
10.Club, Mensa Brands, GOAT Brand Labs, Upscalio, Recommend.my, Bellhops, Venn, Mensa, Peopletail, and Key Reception are some of GlobalBees’ major rivals.
How are GlobalBees and FirstCry related?
GlobalBees is often referred to as a Thrasio venture-style arm of FirstCry, which it is.
Money has always been the prime driving factor of any economy since human settlements started to be sophisticated. From the barter system to the current complicated transactions, the value of services and objects has always been a determining factor. And this value is satisfied today largely through the use of money.
As our economy goes through its highs and lows, it is inevitable that people get confused as to whether they should spend money or save money. This is also because of the fact that there is an unending cycle caused due to the necessity to save money to buy services and to spend money to buy services.
We have always been taught to save money as much as we can. The more we save and the less we spend, the better will be the financial security and stability of our economy. This is something that is constantly fed on to us.
However, Economists across the world have a different opinion in this regard. They say that consumers should strike a balance between spending and saving. It will be harmful either for the individual or the economy if this balance goes off.
Why you should spend money to Support the Economy?
GDP of India
As far as the economy is concerned, consumer spending is a very important thing to keep it stable and better. Had the rich people of the past and present decided to save their money in their closet without spending it, there would have been absolutely no progress in the economy.
The national economy improves only when there is a healthy flow of money through all units of transactions. This is because when you make any kind of large purchase like a house, car or shop; it creates a ripple effect in the economy. It will start to benefit the people associated with the industry and the other local businesses. This is due to the circular flow of money in the economy. Your spending will become another person’s income and vice versa.
Lack of consumer spending can even lead to an economic slowdown. This happens because of the before-mentioned ripple effect. When money doesn’t flow, companies will be unable to reach their profit margins, there will be losses, it will in turn affect the incentives and salaries of the employees which will further affect the people who are dependent on them. Like drivers, house helpers, street vendors etc.
When that happens, the purchasing power of people is affected which will adversely impact the supply-demand nuances of an economy. It can even lead to a recession when left unchecked.
Spending also does not mean that you should use up all your money. It should be in ways that will benefit you immediately or in the longer run. It should first satisfy all your needs. When it comes to wants, you need to analyse what all you actually have to spend for and take a decision that best suits your conscience.
Things to know before you spend to Support the Economy
Check your surroundings
The fact that you should spend money does not mean that you should do it blindly. There are a lot of things that you need to consider before that. The spending capacity of every person varies, and it is based on this capacity that one should control their spending.
Career and Spending
The first thing that one needs to look for is the general employment condition. Analyse if the job you are in at the moment is stable, is it in demand, are there any chances of layoffs etc. Apart from that, analyse the growth of your company as well. If it is expanding over the years, then it is a positive sign.
You need to have a backup plan if there are any chances for unprecedented repercussions. For example, uncertainty is more if your company depends on something external for their expansion like weather, any particular raw material etc.
Family Planning
Your spending should also depend on the nature of your family. Have a thorough analysis of the future plans of your family, your health conditions and also your parent’s plans. Your spending pattern will vary depending on whether you and your partner are planning to have any children, expecting any large repairs on your assets, potential health issues, or retirement plans of your parents, among other things.
Why you should save and invest money to Support the Economy?
While we talk about the importance of spending to boost the economy. Let’s not forget that all kinds of spending are not the same. It should have a long-term reciprocal benefit as well. A logical analysis of the economy shows that the route to improved productivity of a nation lies in the improvement of capital goods.
This can be done only when you save your money and invest it in productive activities. However, be mindful that saving is totally different from hoarding. This is the reason why it was said earlier that one needs to strike a balance between spending and saving.
Saving does not mean dormancy of your money. It simply means that it is entrusted with productive activities that will subsequently improve the economy, unlike hoarding.
Things to Know about Savings
People tend to inherently have an attitude to save money due to the constant reinforcement we have had about financial management. However, everybody needs to know about certain nuances and advantages of savings and how they will impact the economy.
Safe haven
If you have good savings means you are better protected against debt. You can cover your unexpected expenses without taking a loan. It is indeed a great relief considering the repercussions that a thoughtless loan can have. Along the same line, it will help you control your living expenses and thereby finish your loans as soon as possible. This means that your ability to recover during an economic hardship is higher and that will further improve the chances of recovery of the economy. It also means that you are better protected when you are living on your own means.
Savings are not without any risks. Depending on the condition of your nation’s economy the value of your savings can increase, remain constant or depreciate. People who save and invest will have to pay a huge price if the economy goes through a recession. So brace yourselves for uncertainties and losses while you save as well.
Knowing the Difference
The balance that we need to have between spending and saving is the most important discipline that we need to follow to support the economy. To spend does not mean that you should use your money to buy all the things you want.
Neither does that mean that you should donate everything you get. You should be able to analyse your needs and wants. Have a critical approach to decide on which all of your ‘wants’ should you address after satisfying your needs.
This critical approach goes for saving as well. Saving all your money in your drawer does not help you or the economy. For your savings to improve, you need to channelise them in the right direction. Make sure that they are productive activities and will positively influence your savings. It is also important to remember that savings do not equate with hoarding.
Conclusion
As responsible citizens, we need to be mindful of the options we have with regard to supporting our economy. At the end of the day, a healthy and expanding economy will be beneficial to each one of us. When you spend, make sure to do it in a way that is most useful to most people around you. And while saving too, make sure that it improves over time. Let’s all do our part to help our nation prosper.
FAQs
How does spending increase economic growth?
Higher government spending will also have an impact on the supply-side of the economy – depending on which area of government spending is increased.
How do you build a strong economy?
Keeping Manufacturing Units in the Country and reducing the cost of borrowing and increasing consumer spending and investment can help in building a strong economy.
Is saving bad for economy?
A rising personal saving rate can temporarily slow economic activity, assuming no other changes to income.
Covid-19 came and changed everything, from our schedule to our eating habits. As the concern of health and priority is growing due to the pandemic, Indians are now becoming more health-conscious than ever. According to industry experts, there is a possibility of at least a 20-25 per cent increase in the compounded growth of organic food in India for the year 2022-22. One of the most important learning people gained was the need to build strong immunity as a possible shield against some deadly viruses.
Organic food being full of antioxidants and nutrients provide one of the best ways to boost immunity. Hence, instead of risking their health further, people will prefer to buy and even pay an extra premium for organic food. Looking at the scenario it can be said that, this is the right time to invest in a Microgreen Business in India. In this article, we will talk about everything you need to know about the Microgreen business in India and how can one start one. So, let’s get started.
Microgreens are the first leaves that grow from the seeds of herbs, vegetables, or flowers. They are harvested within 14 days of seed germination. Microgreens are found to be 40 times more nutritious than mature vegetables. They are said to be profitable crops and can be grown in a little space. Once they are grown you can start your microgreen business. Microgreen businesses are quite profitable and you could make good money from them.
How to Start a Microgreen Business in India?
Before starting the business remember to do market research on your prospective clients. To grow microgreens, vertical farming is employed. The vertical farm grows plants and produces them by stacking the plants. This is accomplished by using growing shelves suspended on a wall which uses much less space than growing the plants on the ground.
To start a small microgreen business you require a one-time investment in metal shelves, lights, and flat trays. Microgreen business does not require a huge space, you can grow your farm in a space as small as 6sqft. You can even grow microgreens in a small apartment.
Microgreens require a perfect environment to grow, they need at least 16 hours of light and the temperature should be maintained at 15-26 degrees Celsius. Watering should be done twice once in the morning and in the evening. One thing you should keep in mind is microgreens should be supplied immediately once they are ready.
Tips to Start Your Own Microgreen Business in India
Study your Market Extensively
Every market is different from another, so before starting your microgreen business take some time and study your market extensively, and do some market research when growing microgreens for profit. Do study your local markets.
Try Different Marketing Strategies
The most important step of marketing is understanding customer sentiments. Word of mouth sales is an old-school trick but it’s always effective. News always reaches fast, when it travels through the mouth. The news can be both positive and negative because in both ways people will take an interest. Hence, use this old marketing strategy to promote your startup.
Evaluate Health Risk
The health risk is an important aspect to consider while setting up any food business. The disease can spread rapidly if the food product is not handled correctly. Handle and grow microgreens properly to minimize health risks entirely.
Consider Packaging
If you are selling microgreens to a retailer, there is a possibility that if an employee mishandles your products your reputation might be at risk. This is one of many reasons that packaging is important.
Benefits of a Microgreen Business in India
Starting your own microgreen business can be profitable as it has several benefits right from the start. Some of those benefits are:
In a country like India, microgreen businesses are quite profitable. The main advantage of a microgreen business is that it can be grown almost anywhere. It is both profitable and practical to start and manage a microgreen market in India. Many businesses and startups are investing in microgreen business, as it is profitable and requires less space. Those who want to go into this industry can select it as their business, and anyone who can start it without any problem.
Microgreen Plants
Microgreen Business Requirements in India
When you decide to start a Microgreen business, you need to invest in a few things, some of them are one time investments and the others are regular ones.
One time Investments
Metal shelf
Lights
Flat trays
Small space to grow your microgreens
Recurring Cost
Containers
Seeds
Growing medium
Water
Electricity
What Are the Best Plants to Grow as Microgreens?
Some of the best plants to grow as microgreens are:
Pansies
Tomatoes
Basil
Mint
Sunflowers
Radishes
Potatoes
Spinach
Global Microgreen Market Share
Conclusion
Every market is a little different so Starting and growing a microgreen business could take some time and effort, but being consistent is the key. Research your market extensively and market your product effectively to grow your business. Looking at the scenario it can be said that, This is the right time to invest in a Microgreens Business in India.
FAQs
How much Investment is required to start a microgreen business in India?
Investment required to start your own microgreen business can be up to as low as INR 15,000 which can go up to INR 5 Lakhs.
What is the minimum space required to grow microgreens?
You can grow your farm in a space as small as 6sqft. You can also grow microgreens in a small apartment.
Is it profitable to sell microgreens?
Yes, It is both profitable and practical to start and manage a microgreens market in India.
What kind of soil do microgreens require?
Any organic potting soil will work best for growing your microgreens.
We often come across the question of whether e-commerce or retail is best for a business. E-commerce is a replica of business that enables individuals and companies to sell their services or products via the internet. On the other hand, retail refers to the brick and mortar businesses, in which individuals sell their goods or services from person to person in shops, malls, and localities.
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According to Statista 2021, total retail sales, both online and offline, amounted to 24.2 trillion USD, out of which 19.1 trillion USD was generated by the brick and mortar retail channel and around 4.9 trillion USD was generated by the eCommerce sales channel. In the same year, global retail sales accounted for a growth of 9.7% as a whole and eCommerce accounted for around 19.6% of total retail sales.
The digital form of business has seen a great increment specifically in this pandemic. But at the same time, the heavy revenue generated from retail cannot be ignored. In this article, we will discuss different factors that will help you know what is best for your business between eCommerce and retail.
Retail Ecommerce Sales Worldwide from 2017 to 2022
In the following points, we will discuss a comparison between eCommerce and retail from different perspectives:
Which Has Lesser Prior Investment?
Ecommerce Starting an eCommerce business may sound like an expensive process but with proper planning and execution, one can start running it on a budget. The investment required to start your eCommerce business in India is nearly 5-10 lakh rupees. It includes building your business website, hosting, domain, sales and management tools, web development, and advertisements.
Retail Investment in setting up a retail store can be an expensive process. A retail store has to invest in various things before selling its product. These include building, buying, or renting a store, paying license fees, hiring staff for multiple positions, paying location tax, investing in filling up the store with sufficient items to attract a customer, and other necessary resources relating to business and government. All such expenses make setting up a retail store far more expensive than starting an eCommerce store.
So, comparatively, the cost of investment is lower in the case of eCommerce than in retail. The advantage of owning an eCommerce store is that it reduces the cost of setting up a brick-and-mortar store or hiring delivery staff. This is because eCommerce stores send their manufactured products to branches such as Amazon, FedEx, Ship Bob, Flipkart, etc. for order fulfilment. After this, it is the responsibility of these branches to pack, track and send the order to the buyer.
Ecommerce It is easier to maintain eCommerce compared to a retail store. But there are still some complications that need to be checked from time to time so that the store can run smoothly. For example- you need to maintain a warehouse or any proper space to keep the products safe and accessible for dropshipping. Since you are not directly connected with your customers, you will have to keep a check on analytics to track customer experience and discover their new tastes and likings. You will also need to keep a check on the timing of product delivery to avoid negative feedback from customers.
Retail The retail business is considered to be a bit more complicated in terms of maintenance. This is because for various reasons like there is a need to maintain a proper brick-and-mortar store and inventory, and maintenance of an adequate communication balance on both sides in real-time with suppliers and customers. Also, you have to keep a regular check on your staff if they are handling the customers politely. You will have to train them and make them more knowledgeable about the services and products you are offering so that they can deal with the customers pleasantly and accurately.
It is easier to modernize the stock in an eCommerce store. But this task becomes pretty difficult with retail stores as for updating products, you need to set up meetings with suppliers now and then. So, in case of ease of maintenance, eCommerce is a better option for your business.
Share of consumers going to brick and mortar stores by country in 2021
Which Has Better Profitability in Future?
Ecommerce With eCommerce comes a great benefit which is unlimited access to customers. Once you are over the internet, there is no limit to the number of people you can reach. Ecommerce allows you to showcase your products and services to a large number of people, therefore, no limitation to any particular locality. Moreover, you can always expand your business and attract new customers via smart and modern marketing techniques. These include offering free shipping, discounts, gift cards, reward points, etc. All this ultimately ensures better sales and thus, better profits.
Retail Retail stores do not have very wide access to the customers as they have limitations due to their fixed location. However, this does not mean that there are no benefits of a retail store. Even in today’s time, many customers do not feel satisfied until they can touch and feel the products themselves. So, the customers who are still skeptical about online shopping contributes to the sales and profits of retail stores. Moreover, there are fewer chances of online fraud with retail shops, as the customer doesn’t need to provide their personal information including emails, mobile numbers, bank details, etc.
In this case, eCommerce will be the clear winner because the products and services of eCommerce stores are visible to a huge audience which makes for a large potential customer base and thus, better sales and profits.
We compared e-commerce and retail stores based on investment, performance easiness, and profits obtained. Although there are factors like trusted quality and physical interaction that make retail stores better than eCommerce ones. But after making an overall comparison and looking at the future of the digital world, we concluded that eCommerce stores are the best way to expand your business and earn more profit in the future since it offers a wider reach with less investment.
However, you can also take another way which is you can opt for omnichannel retail as it allows you to buy products either online or physically through the real stores to keep your customers satisfied in all the possible ways.
FAQs
What is the difference between eCommerce and retail?
Retail is something that can be conducted in a brick-and-mortar store, online, between persons, or through direct mail. However, eCommerce refers to electronic commerce which means commercial transactions that are conducted only through the internet.
How owning an online store is better than physical stores?
Owners of the online stores can sell and ship their products and services to a large number of people with fewer investments as buying a website is easier and more economical than buying a physical store.
What is the biggest challenge faced by eCommerce?
One of the most significant challenges faced by eCommerce is the security issue. Ecommerce involves a great deal of personal information and even a small technical issue can create huge damage to a business’s operations and image.
What is a retail store?
The most common example of a retail store is the conventional brick-and-mortar stores like Walmart, Best Buy, etc. However, retailing as a whole includes goods or services sold through stores, kiosks, or even on the internet.
Richie Rich can smoothly afford medical bills from his pocket. So, it is weird that the uber-rich class needs insurance. After all, they don’t need to run on a monthly paycheck-to-paycheck cycle. In general, it is observed that insurance is the weapon to fight the out-of-pocket fear of the commoner.
The stunning fact is that 70% of wealthy Indians adopt life insurance as their most trusted investment destination, as per a survey quoted by the PTI news agency. A Silicon Valley billionaire purchased a $201 million insurance policy and enlisted in the Guinness Book Of World Records in 2014.
The rich people are very keen on buying stuff and indulging in new investments. They invest in various things like stocks, real estate, crypto, private equity, and more to ensure that they remain rich. Another important thing that they tend to buy is insurance to ensure that their heirs can stay rich too. Thus, insurance is not a joke for the elite class, and never it can be. Here are the top 8 reasons why the rich people are keen on buying insurance:
Relief from The Tax Trouble
Many wealthy people have a lot of cash in the bank, so losing their income would not put their loved ones in a bad financial situation. There are a few compelling reasons why wealthy people purchase life insurance even in these circumstances. They used to go for insurance to maintain their ‘tax health’ rather than after-death benefits or pay medical bills.
If we take some examples in the US market, if the majority of the wealth is left behind by the deceased businessman, tied up with another firm, then there may not be sufficient tax to pay tax without selling the asset. A big life insurance policy could give money to pay the taxes in these circumstances. This security could preserve the estate intact, preventing heirs from having to sell goods they inherit to meet IRS (US federal tax body) or state tax responsibilities.
In the Indian market, if you buy an insurance policy, under Tax act 80C, the policyholder will get tax exemption on it up to a certain amount. NRI or foreigners can take advantage of investment in India. Act 80 D is there to cover your health insurance, mediclaim, or critical illness under the tax exemption system.
Life Insurance Investments India, by Sector (FY17 – FY21)
Estate Distribution and Strategic Divorce Settlement
Insurance is useful as an intangible asset for the rich during property resolution or estate distribution among inheritance—many next generations of high net worth individuals used to file court cases for unequal property settlement. Suppose the billionaire has two children, X and Y, where X had an interest in the family business, but Y made his cup of tea with Cricket. So the owner decides to hand over the main business to X and the remaining plot to son Y. However, the asset value shows discrimination where the whole life insurance can make the balance with cash value.
When a rich person goes for marital separation, sorting out life insurance is sometimes neglected among the clumsy tasks that come with a divorce. The instant liquidity of cash helps the spouse with alimony protection and secures the child’s education because no one can predict the future and not even the ex-spouse, or the policyholder. The sudden demise of the owner or accidental fall of business may push the widow or ex-spouse into a lifetime struggle to get the shareholders’ confidence.
Upon the death of the bread earner, families and dearest ones are provided financial safety and soundness through insurance, with less paperwork formality. When access to capital is vital for some businesses and life situations, there is hardly any investment tool that can offer such instant cash value. The legatees may need to seek court orders such as probate or succession certificate to claim assets after a decedent’s death.
Assuming there is no dispute among legatees, still this may take up to a year, and in the event of a legal conflict, the wait could be even longer. The estate’s assets are locked up and unavailable to your family in the interim. But with insurance, the family or successor can have financial support with less paperwork within a few weeks. So, another reason why the rich buy insurance is to take care of the members in case of an unpredictable death of the main bread earner.
For example- The recent struggle of the Cafe Coffee Day owner’s widow to convince the investors despite having a nearly $1billion market value with 1600 outlets.
Liability and Debt Protection After Death
If we check broader prospects, the topmost rich people and their most valued Indian companies lost nearly $14 billion in market capital amid the pandemic of March 2021. Many Fortune India 500 listed companies also are struggling with $14 billion to $28 billion debt.
In general, an individual’s liability can be recovered even after death. Under the law, the estate must first pay off all of the deceased’s liabilities. There is a possibility that creditors will claim the insured’s assets if the policyholder dies. Even the sum insured can be sought by creditors or attached by the court for debt repayment in this case if you purchase a life insurance policy under the Indian Married Women’s Property Act of 1874 to prevent this. The procedure is identical to that of traditional life insurance. The only difference is that when filling out the policy proposal form, the applicant must pick Policy under MWP Act 1874.
Asset Protection Tool
Asset protection insurance refers to tactics to safeguard one’s assets from unwelcomed accidents. Asset protection is a part of financial planning that tries to keep one’s assets safe from creditors. The body parts and industrial accidents, natural calamity, theft, fraud, and robbery are covered by the policy. It mitigates the chances of being out of cash.
High-net-worth individuals tend to insure their rare collections, farms houses, cars, body parts, golf courses, and massive homes. Football legends Ronaldo and Messi have the most expensive insured body parts, their legs, with insurance values of $144 million and $900 million, respectively.US singing icon Madonna insured her breasts with $2 million.
Insurance – Asset Protection Tool
Risk Management Tool
The famous Walt Disney used his life insurance to build Disneyland, his first theme park, in 1953, when no bank would lend him the money. It reduces his investment risk and liability as well as fundraising concerns. There are some major risks like business debt, personal debt, estate holder’s risk, and market risk, which can be treated with insurance up to a certain parameter.
Ransom and kidnapping insurance is also available, targeting the elite class. If the business tycoon faces an accident and loses the ability of job in the long-term or short-term, the disability income insurance can protect their lifestyle. Thus, another reason why the rich class invests in insurance.
Guaranteed Growth
After the fainting covid wave, we entered into the Russia-Ukraine mess, another unexpected tsunami amid this global economic turmoil. Since covid, good sections of investors avoid money under direct market flow and look for guaranteed financial instruments like insurance. Experts say that uncertain crypto and volatile equity markets push flamboyant investors for low-risk plans.
For example, whole life insurance is assured as the cash value is not dependent on the market. It is not a subject of any market risk. It is an interest rate-driven tool. Guaranteed interest plans are insurance policies that promise the insurer a precise or fixed rate of interest for the duration of the policy.
Participating on company boards as non-profiting posts, you could be sued if your arbitrary decision or reformative steps drag a significant drop in PAT(Profit after tax) on the balance sheet. Directors and Officers insurance covers personal liability arising from claims made against Directors, and Officers, for claimed misstatements, neglect, errors, or breach of duty when serving in a managerial designation.
These top executives are answerable to their shareholders or investors. In case of any wrong decision by them, if the company faces loss, then criminal or civil action is very common. D&O liberty insurance cover this protection. They have to face a legal battle for:
Defamation, slander, the act of omission or negligence, violation of duty, breach of trust, misrepresentation or misleading statement, defamation, slander, the act of omission or incompetence.
Discrimination, retaliation, slander, refusal to promote, sexual harassment, and other inappropriate workplace behavior are examples.
Claim exclusively based on their social standing.
Conclusion
Thus, the rich invest in insurance for multiple reasons like future financial security, debt management, and family protection, among other things, in the event of an unforeseen environment. According to NCLT, a quasi-judicial authority, 283 Indian companies were declared insolvent after the unpredicted lockdown jolt. Affluent Indians are also facing huge medical debt in post-covid recovery. So, in this current context of financial turmoil, lockdown, and covid concern, insurance is critical to reducing unplanned financial effects and creating financial security.
FAQs
Why do rich people buy insurance?
Rich people buy insurance for reasons like:
Smooth transfer of wealth to the heirs
To help pay future estate taxes
Future risk management
Asset protection
Easy cashflow in tough times
Relief from tax
Why permanent life insurance is a good investment?
Permanent life insurance is a good investment because you do not have to pay taxes on interests, dividends, or gains on the cash value of your insurance until you withdraw it.
What is the difference between investment and insurance?
A simple difference between the two is that investment takes care of your present and the near future whereas insurance takes care of you and your family in the long run.
Why do rich and famous people insure their body parts?
The rich and famous people insure their body parts to supplement the lost income in case a body part is injured, handicapped, or lost.
‘Money can solve anything’- this is the first thought that comes to the mind of most of the startup founders. The startup founders live in the biggest myth of life that, once they have funds for the business, their startup will automatically run. This is the biggest lie and one of the common mistakes that startup founders make and that has ruined many great startup plans. The seed funding is the first step in the path of a successful startup, but never assume it as a final destination, because the road is very long after this. Launching a new startup is like a raising baby. After the launch of the startup, comes the biggest responsibility. You need to plan the whole life of your baby and provide everything to them. So just like it, after getting the initial investment, planning and using it properly to boost the startup is important
When you are beginning with your startups, with all your excitement and passion, the only thing that you want to concentrate on is how to become successful. You do every possible thing to achieve your dreams but being an entrepreneur is not an easy job. One needs to burn their midnight oil for that. While being an entrepreneur, there are mistakes one can make which may disrupt the process of reaching the top.
Numerous startup founders fail to manage it after the seeding step, as they had utilized their all energy in getting the funding. The startups usually fail because they fail to deliver their promises and fail to manage their team. These are the two major reasons behind the downfall of many startups. However, they are not only mistakes made by the startup founders, there are many other common mistakes that startup founders make in the bucket. I have rounded up a few mistakes that you need to avoid at any cost to be successful. In this article, we will talk about the Common mistakes that Startup Founders make in their businesses.
Thoughts should be big and the start should be small. Overthinking in terms of business may affect the revenue and process of work, plus it doesn’t help you in reaching a conclusion or solution to your problem. Instead, it leads to the creation of problems that are not even there in reality. Decisions should not be risky and should be taken after thinking and evaluating the entire situation properly but too much overthinking can lead to a missed opportunity.
On the other hand, underthinking any situation is also one of the main causes that may affect the business. One needs to dwell deeper, when there is a need, rational thinking is needed so that effective leadership can be formed.
“Take time to deliberate, but when the time for action comes, stop thinking and go in” – Napoléon Bonaparte
Wrong Investments
In terms of startups and new entrepreneurs, investment is quite a big concern. Be aware of your expenses and savings. Higher Investments in a product without assuming the demand may damage the economy. Investments should be made after analysing the demand for the product.
Poor Planning
Everything needs a plan, especially when you are starting a new business, planning becomes mandatory. The plan will guide you through every stage, it is like the GPS that will take you to your ultimate destination. However, wrong planning can create havoc in your dream business. Rough ideas for saving money should not be encouraged, it can cost you your dreams. Pre-planning for saving money should be made keeping the situation in mind be aware of your target audience and concentrate on making products and services according to them.
Incorrect Estimations
Estimations of cost should be appropriate. Underestimating the order for developing the business may lead to loss of money and affect the financial state of the company. Thoughts should be appropriate to the situations which include time, surroundings and environment of the market. Always estimate the value higher than that of the original price to keep any sudden expenses in check.
Decision Making
While taking decisions entrepreneurs should take care of the situations they face. One wrong decision can lead to the death of your dream startup. The decision should not be risky and made at the right time. Taking risky decisions at the beginning stage should be avoided in order for better growth.
Hiring
The hiring of the staff should be less during the initial stages. A huge number of staffs in the starting point with less amount of work will cause a crisis at the time of salaries. Hiring a fulltime staff when a part-time can do the job perfectly is unnecessary.
“It’s expensive to hire the wrong people. If they leave it’s expensive. If they stay it’s expensive.”― Nathan Mellor
Being Organised
Avoid being unorganized. You have to follow a procedure in order to make your startup work. Have your plan and goals sorted in your mind. Jot down on paper your list of priorities in order to stick to the plan. Maintain an organised format for all you want to accomplish. When you begin with a startup, a number of things happen at a time, so listing them according to your priority and then finishing them is the best you could do.
Avoiding Suggestions
Don’t avoid suggestions and decisions that people give. Learning from the experts always helps to avoid some loops in the field of A particular business. a person with experience can definitely be of your help if you decide to listen to them. The words of the peers should be paid heed to.
Neglecting Budget
Maintaining the budget should not be neglected. Planning on the budget in order to avoid spending extravagantly is required. The budget should be maintained for growth and development. Budget planning should be made locally so that it helps us to maintain the economic growth of the business. High budget tenders should not be encouraged.
Marketing
Marketing of the business should not be neglected, it is one of the most important factors for the survival of your startup. It should be clear and sharp so that it reaches the target audience. Marketing at the starting stage should not be very elaborate as these marketing conditions affect growth. A proper marketing strategy has to be made so that your business can be visible in front of your customer and they can get attracted to it.
Confusion
Avoid confusion in assigning work while maintaining the budget. Confusion may lead to stress which in turn affects progress. Confusion should be avoided in terms of marketing too. It should be straight so that people can get convinced easily. Creating confusion will only be haphazard for the business.
Forgetting About Bookkeeping
To utilize the money properly and keep it from wastage, make the required documents and accounting records perfectly. To avoid the common mistakes that startup founders make these points to be noted. Bookkeeping is a major part of a successful business. You need to record all the expenses and incomes accounts to tally the growth of the business. You need to record all the petty and big cash expenses daily.
Unwanted Expenses
You do many unwanted expenses in the daily course, which can be easily avoided or can be minimized. So identify those expenses and reduce them to a minimum level. Don’t spend money on the decor of your office to attract customers, as they are here for the product. Don’t hire unwanted employees like receptionists, if you are capable of handling your own business calls and making your own coffee.
Conclusion
Startup founders make many mistakes after getting the seeding. While building a business, mistakes need to be avoided. Although mistakes are a part of our life and they are inevitable, it is important to avoid these mistakes that will do nothing but lead to problems in your business. Even when you make mistakes, learn from them and try to not repeat them.
FAQs
What causes startups to fail?
Most startups fail due to insufficient financial resources.
What percentage of startups fail?
90% of startups fail in the first 5 years of the company in India.
A brand ambassador is the image of image and therefore, lies crucial to the growth and success of the brand. This is because it is the ambassador of the brand who embodies the brand that he or she is endorsing, thereby leading to influencing the consumers and raising awareness. In today’s marketing landscape many brands prefer to have younger celebrities as the image of their brands, but the one celebrity who is an exception to this trend is none other than Amitabh Bachchan. The 79-year-old veteran actor has still remained to be in demand and relevant in the endorsement world.
Amitabh Bachchan is known for his elegance, trustworthiness, statesmanship, maturity, and mass appeal. The superstar has proved time and again that age is no bar, be it in the film industry or the marketing business, as he is still one of the top actors who are sought after by brands from all over the country and beyond for endorsements.
Amitabh Bachchan, who was born Inquilaab Srivastava, is one of the most iconic actors with more than 50 years in the industry, a film producer, television host, playback singer, and a former politician. The actor is regarded to be one of the most influential actors in the history of Indian cinema and is also ranked ninth on the list of the most powerful people of India in 2019, according to India Today.
During the 70s and 80s, the actor was termed as the one-man industry by the French Director, Francois Truffaut because of his domination in the Indian film industry. The actor is known for his work in countless Bollywood movies like Sholay, Deewar, Shahenshah, Namak Halaal, Don, Badla, Mohabbatein, Baghban, Pink, Piku, and more. Besides, the actor is also the host of a popular reality show known as Kaun Banega Crorepati.
Amitabh Bachchan has won several awards such as Filmfare, National Film Awards, the Dadasaheb Phalke Award and has also been honored by the Indian government with Padma Shri, Padma Bhushan, and Padma Vibhushan for his contribution to the arts.
The actor is also honored with the Legion of Honour by the Government of France as the highest civilian honor for his exceptional career in the world of cinema. Amitabh Bachchan is known to charge over Rs 5 to 8 crore for an ad commercial. The actor’s brand value is $41.2 million (2018), while the net value of the actor is $400 million (2021).
So far, the actor has endorsed brands like Maggi, Emami, Parker Pen, Lux Innerwear, Dabur Chawanprash, Dr. Fixit, Cadbury, Pepsi,Times of India, Tata Sky, Kalyan Jeweller, Navratna Oil, Gujarat Tourism, Mankind, Reid & Taylor, upGrad, JustDial, ICICI Prudential Life, Flipkart, TVS Jupiter, Cadbury Dairy Milk, Cycle Agarbathi, First Cry, Tanishq and other government campaigns like Swacch Bharat Abhiyan, Polio Vaccine, etc.
Along with endorsing a list of brands, Amitabh Bachchan has also been a crypto-enthusiast and has developed into quite a crypto-king of late. Cryptocurrency might be sounding like one of the investments that are not quite clear to many Indians but at the same time, the decentralized digital currency and the investments in the same, is rewarding a whole lot of celebrities, including popular Indian personalities. Amitabh Bachchan is one such renowned Indian celebrity that has been rewarded for his crypto investment where he had invested Rs 1.6 crore, which ballooned to become Rs 112 crores just within a year.
It was in 2015 that Amitabh and his son, Abhishek Bachchan invested around Rs 1.6 crore ($250,000) in Meridian Tech Pte, a Singapore-based, Venkata Srinivas Meenavalli-founded company, and within 2 and half years of the investment, they collected returns close to Rs 112 crores ($17.5 mn) in value.
Nevertheless, here’s a list of all the prominent brands that Amitabh Bachchan has endorsed to date:
Let’s look at the list of brands endorsed by Amitabh Bachchan:
upGrad
upGrad is the newest brand to be endorsed by the Big B. The Mumbai-based education technology company has roped in Amitabh Bachchan as its brand ambassador on February 28, 2022, and releases its first advertisement campaign on March 23, 2022, which is spreading via #upGradAbroad and #ABchaleABROAD.
upGrad Abroad is the new initiative designed by the popular edtech company, which is promoted by Amitabh Bachchan. Featuring Amitabh, upGrad, through this ad, promotes its initiative to help the Indian students start in India and study abroad, with a degree from the reputed universities outside of the country without wasting their money of staying abroad and studying.
Maaza
The world’s largest brand of tropical fruit drinks, Maaza was founded in 1976 and is owned by The Coca-Cola Company. The fruit drink brand, popular for its selection of mango, orange, and pineapple drinks, has brought together Amitabh Bachchan and Pooja Hegde in its latest campaign titled ‘Dildaar Bana De’ in February 2022. This TVC is directed by the celebrated Bollywood filmmaker Shoojit Sircar.
Maaza rolled out its new variant “Aam Panna”, which again grouped Amitabh Bachchan and Pooja Hegde together ahead of the summer season 2022.
MediBuddy
Founded in 2000, MediBuddy is a digital healthcare platform that helps the users book free consultations, checkups, lab tests and follow up the same without any hassles.
The Bengaluru-based healthcare company roped in Amitabh Bachchan as its brand ambassador on February 8, 2022, who has collaborated with MediBuddy in their recent advertisement to promote MediBuddy Gold, a healthcare subscription package that works for the whole family. The Amitabh Bachchan featured MediBuddy advertisement that came out on March 10, 2022, explores the benefits of MediBuddy Gold subscription, which enables the families of the users to receive free unlimited medical consultations from experienced doctors that can be availed 24×7.
Muthoot Finance
Muthoot Finance is one of the most reliable Indian financial corporation and the largest gold loan NBFC in India. Founded in 1939 by Mathai George Muthoot in Kerala, Muthoot offers a range of services including money transfers, foreign exchange and wealth management services, travel and tourism services and more.
Amitabh Bachchan is the face of Muthoot as well, which launched its newest marketing campaign on February 4, 2022. The advertisement focuses on the belief and trust in the brand that everyone should maintain.
Amway
Amitabh Bachchan was roped by the popular direct selling company, Amway, as a brand ambassador, on October 27, 2021. The US-based company that manufactures a wide range of consumer goods, has collaborated with the Big B of the Bollywood industry to ensure that the veteran actor endorses the the brand and promotes the Nutrilite range of the Amway products along with guiding the youth, empowering the women and others with the help of their entrepreneurship schemes.
FirstCry
FirstCry is an Indian e-commerce store that was launched in 2010, the company is known for its huge variety of baby products. By 2020, the company had opened over 380 offline stores across the country out of which 350 were franchise stores making it Asia’s largest online shopping store for kids and baby products.
Amitabh Bachchan was signed as the brand ambassador of the company in 2015, after the birth of his granddaughter. In the commercial, the actor is seen to be in confusion while shopping for clothes for an infant as their unlimited options. After the ad, the company witnessed a massive increase in sales as the ad resonated with the people and passively offered them a chance to connect with Big B.
While talking about making Amitabh Bachchan its brand ambassador, Supam Maheshwari, CEO, and founder, Firstcry mentioned that the company needed to create maximum impact with the campaign. Amitabh Bachchan brings in credibility to the brand as he has a mass India appeal and he is also a caring grandfather.
Maggi
Amitabh Bachchan in a maggi commercial
Maggi is an international brand that originated in Switzerland in the 19th century, however, the company was acquired by Nestle in 1947. Maggi is known for its seasonings, instant soups, and instant noodles that are popular in countries like India, Pakistan, Nepal, Singapore, Malaysia, Australia, New Zealand, and Bangladesh.
Amitabh was the brand ambassador of Maggi but the actor stopped supporting the brand after a controversy with Maggi. The actor, however, has also been featured in many Maggi commercials before ending their deal, where the actor is seen introducing the brand to cater to the old generation audience and make them eat Maggi.
The actor can be seen pitching the idea of happiness while eating the “2 minute waali Meri Maggi”. The campaign with Amitabh Bachchan was very successful, and Maggi made large profits out of it no doubt.
Cadbury Dairy Milk
Cadbury Dairy milk is a popular brand of milk chocolate that is manufactured by the conglomerate Cadbury. The brand was first introduced in 1905 in the United Kingdom and now has a huge portfolio of products under it. However, every product in this brand is made mainly with milk chocolate.
The Cadbury Milk chocolate became the bestselling chocolate bar in the UK in 2014 and is also currently available in countries like India, Kazakhstan, China, Srilanka, and Pakistan. Big B became the company brand ambassador in 2004 and since then has appeared in many of its commercials.
The actor is also responsible for making the tagline “Kuch Meetha Hojaye” popular, emphasizing the celebration of the smaller things in life with something sweet like the Cadbury Milk Chocolate. In an interview, Bharat Puri the managing director of Cadbury said that they have chosen Amitabh Bachchan because he has a universal appeal that extends to everyone from 6 to sixty years old.
Kalyan Jewellers is one of the most popular Indian jewelry showrooms chains. The company currently is present in overall metro cities of India and even in West Asia and has over 8000 employees. Amitabh Bachchan and Jaya Bachchan became the company’s global ambassadors in 2012.
Thanks to his efforts Kalyan Jewellers has now become India’s single largest self-owned jewelry chain. The group currently holds a strong presence especially in South India, with 35 stores across four southern states. The ad commercial of Kalyan jewelers features Amitabh Bachchan with his daughter Shweta Nanda.
This ad beautifully portrays the charm that jewelryadds to every occasion. The scene features Amitabh Bachchan buying jewelry for his daughter and his wife which evokes a very relatable emotion in the audience.
Parker Pens
The Luxor Writing Instruments company brought out the Parker range of pens, which are marked by their elegance and sophistication. These Parker pens were initially endorsed by Amitabh Bachchan between 2001 – 2008, and after a gap of 2 years, the Bolywood superstar had again resumed his collaboration with a 2 year-long contract on June 15, 2011.
Emami
Emami Limited is a leading personal and healthcare products conglomerate that has its headquarters based in Kolkata. The company is a growing global presence and a huge portfolio of well-known products like Boroplus, Navratna, Fair and Handsome, Zandu Balm, Kesh King, She Comfort, Mentho plus Balm, and Fast Relief.
It has over 250 products made with ayurvedic formulas which are available in more than 50 countries like the UK, Poland, Russia, Ukraine, Belaris, UAE, Saudi Arabia, Qatar, Bahrain, Kenya, Singapore, Malaysia, and Bangladesh. The company has had other Bollywood actors as its brand ambassadors like Juhi Chawla, Katrina Kaif, Kangana Ranaut, Sonakshi Sinha, Salman Khan.
Emami made Amitabh Bachan the brand ambassador for its Boroplus brand which is a natural antiseptic cosmetic brand originating from Russia. The actor has been featured in many television advertisements in the ad campaign of Boroplus. It is because of these ads that the brand has become successful and positioned itself in the audiences’ minds.
The actor is currently the brand ambassador of Gujarat Tourism and is featured in many commercials of the ad campaign. The “Khushboo Gujarat Ki” taglined campaign by celebrity Amitabh Bachchan became so popular that it increased tourism in Gujarat by 14% per annum which is twice that of the national growth rate.
This campaign has won several awards and has increased the benchmark of tourism ads by making Amitabh Bachchan its face. Big B became part of the initiative by the Gujarat Government to promote its Tourism.
In the advertisement“Khushboo Gujarat Ki”Amitabh Bachchan can be seen in tourist spots like Bhuj, Dhola Veera, Mandvi and Rann of Kutch while exploring the culture of Gujarat and urging people totravel to Gujarat.
Lux
Lux Industries, a notable innerwear manufacturing company of India, is one of market leaders of the Indian segment of innerwear. Founded in 1957, and boasting of a complete range of innerwear for men, women and children, Lux is a famous name still in its niche.
The popular inner garments company had roped in the veteran actor as the brand ambassador of Lux Venus and Lux Cott’s wool in August 2017. Amitabh came out with the advertisement of Lux Inferno last in October 2019 after featuring in multiple ads for the company. Kartik Aaryan was another actor who was seen alongside Bachchan in the same ad.
Justdial Limited is a company that provides local search for different services in India over the phone, website, and mobile apps. Justdial has its headquarters based in Mumbai, Maharashtra but also has offices in cities like Ahmedabad, Bengaluru, Chandigarh, Chennai, Coimbatore, New Delhi, Hyderabad, Jaipur, Kolkata, and Pune. In 2020, Justdial has more than 10,984 employees.
Amitabh became the brand ambassador after investing an undisclosed amount in the company. This investment was later confirmed as Rs 6.27 lakhs in 2013 when he bought 62,794 shares of JustDial, which gave him returns close to Rs 7 crore, a whopping 10190% returns. Amitabh has helped increase the popularity of Justdial by featuring in their ad commercials. The actor can be seen portraying how the Just dial app is better than its competitors, its features and it is a one-stop-shop for all their customer’s needs.
Dabur Chyawanprash
Dabur took over the 2,500-year-old Ayurveda formula with its brand purpose and created the country’s first-ever branded Chayanprash in 1949. The company claims that two spoons daily of Dabur Chyawanprash support immunity and are beneficial for overall health and well-being.
The company has made many iconic ads with Amitabh Bachchan as its brand ambassador and continues to aim in boosting the country’s immunity, especially in the times of the Covid pandemic. In the 2000s, the company witnessed a sudden dip in sales that is when the actor was roped in to be the face of the brand and drive its growth.
The company put out its largest ad campaign with Rs 10 crore featuring Big B, which showed him being strong after eating Chyawanprash and which provides immunity to all kinds of disease. Amitabh Bachchan made it a household name by changing the perception of the product.
ICICI Prudential Life Insurance Company Limited is a popular life insurance company in the country. It was originally established after the joint venture between ICICI Bank and Prudential plc.
The company is headquartered in Mumbai, Maharashtra, and offers services life insurance and asset management business. The company signed Amitabh Bachchan as its brand ambassador and was paid Rs 10 crore as endorsement fees to be featured in its commercials.
In an interview, the actor commented on his association with the company by saying that, he was happy to associate with ICICI Prudential Life as he sees life insurance as a product that offers a feeling of reassurance to people, for all of them who opt for it. He also added that ICICI Prudential Life has been able to make a mark in the industry and is a trusted life insurance brand.
Polio Vaccine
Amitabh Bachchan is the face of the Polio campaign in the country, the aim of the campaign is to spread more awareness about the easy availability of the polio vaccine. The actor’s partnership with UNICEF has successfully persuaded many parents to get their children vaccinated especially in rural areas.
The tagline of the campaign “Do Boond Zindagi Ki” talks about the importance of the two drops of the polio vaccine. This award-winning campaign ad was featured on Television and radio emphasizing the seriousness of the issue.
The actor also took part in many public appearances and field visits to remote areas of the country to create awareness about polio prevention. Amitabh Bachchan plays the main role in why the campaign was successful as the actor has a huge popularity, credibility, and mass appeal not only as a celebrity but also as a humanitarian.
Navratna Oil
The popular Emami Oil product, Navratna oil, which is well-known for its cooling benefits and the relief that it provides people from headaches and body aches is an Ayurvedic product and has seen Amitabh Bachchan time and again as its endorser. The Big B has featured in multiple advertisements created for the promotion of the same and in the latest of the advertisements he has also sung the iconic Pyaasa song “Sir jo tera chakraye” performing as #RaahatRaja.
Along with the advertisements and investments, Amitabh Bachchan also usually remains busy on his work front. Runway 34, Brahmastra, Jhund, Goodbye, and The Intern are some of the movies that Bachchan is currently working on, as of reports dated January 31, 2022.
Dr Fixit
Hailed as a leading waterproofing expert, Dr Fixit from the popular adhesive brand, Pidlite, brings right waterproofing solutions for the users to make their homes leak-free with the best waterproofing services in India.
Dr Fixit had announced Amitabh Bachchan as its brand ambassador in August 2016. According to the deal, the veteran actor was selected to be the person to spearhead its flagship campaign and act as the face of the brand across multiple engagement platforms. The recent Dr Fixit campaign that came out in December 2020 was the last campaign of the brand that featured Bachchan.
Reid & Taylor
Founded in 1998, by S Kumar’s Nationwide (SKNL), Reid & Taylor was a fabric and suiting brand. As per the last reports, the Reid & Taylor brand’s shares were liquidated in December 2018 after RTIL was dragged to insolvency court.
This popular suiting and fabric manufacturing company had announced Amitabh Bachchan as its brand ambassador in July 2013, after which Bachchan had featured in a number of the Reid & Taylor advertisements.
Mankind
Mankind Pharma is a pharmacy company, which is counted among the top pharmaceutical companies in India. Founded in 1995, Mankind operates 34+ overseas destinations and boasts of 14000+ happy customers.
The popular medicine manufacturer had collaborated with Amitabh Bachchan towards the end of October in the year 2017, announcing the veteran actor as its brand ambassador. The latest Mankind ad has been launched in September 2021 and features Amitabh as well.
Conclusion
When it comes to endorsements and advertisements Amitabh Bachchan is one of the most sought-after actors even at his age because of his reliability among the masses, elegance, trustworthiness, statesmanship, mass appeal, and maturity. He is also the one of the highest paid actors to feature in endorsements.
Amitabh Bachchan is the country’s most iconic actor as he has starred in more than 190 movies since the 1970s. The actor is loved, admired, and respected by a massive public following. Big B as most people fondly call him is one the most prominent celebrity in the country, which is why many companies still prefer him to be featured in their advertising campaigns.
FAQs
Who is Amitabh Bachchan?
Amitabh Bachchan is one of the most iconic actors with more than 50 years in the industry, a film producer, television host, playback singer, and a former politician.
What is the brand value of Amitabh Bachchan?
The brand value of Amitabh Bachchan is $41.2 million (2018).
What are the main brands endorsed by Amitabh Bachchan?
The main brands endorsed by Amitabh Bachchan are Polio Vaccine, ICICI Prudential Life, Dabur Chyawanprash, Just Dial, Gujarat Tourism, Emami, Kalyan Jeweller, FirstCry, Cadbury Dairy Milk, Maggi.
What are the other brands endorsed by Amitabh Bachchan?
The other brands endorsed by Amitabh Bachchan are Parker Pen, Lux Innerwear, Dr Fixit, Pepsi, Tata Sky, Mankind, Reid & Taylor, Flipkart, TVS Jupiter, Cycle Agarbathi, Tanishq, and other government campaigns like Swacch Bharat Abhiyan, etc.
How much does Amitabh Bachchan charge for a brand endorsement?
Amitabh Bachchan charges over Rs 5 to 8 crore for an ad commercial.
What is the net worth of Amitabh Bachchan?
The net worth of Amitabh Bachchan is $400 million (2021).
Celebrities enjoy having their names adorned with a variety of titles. One of them is an entrepreneur. Celebrities have been investing in businesses and startups for a long time, and their fame and wealth help them gain a leg up on the competition. One of these celebrities is Ryan Reynolds.
Ryan Reynolds is a Canadian actor and producer, who started his acting career with small roles in TV shows, but became a household name after he got his role on the comedy show ‘Two Guys and a Girl’ between 1998 and 2001. Since then, he has been in a number of movies and shows and has gained a lot of fame and wealth. He is most known for his hilarious yet powerful character, Deadpool. But this isn’t about his performing accomplishments; instead, it’s about his business experience.
Ryan is well-known for his astute investments in startups and innovative marketing strategies. He’s made a name for himself as a business tycoon by investing in startups. It’s the best bargain ever to have a megastar invest in and promote your company. The Deadpool actor enjoys investing in small businesses and making small investments before taking the company to the next level.
Let’s take a look at all the investments of Deadpool actor, Ryan Reynolds.
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In 2018, Ryan Reynolds and George Dewey launched their own film production company and digital marketing agency. Maximum effort consists of two parts: Maximum Effort Production and Maximum Effort Marketing. Both are collaboratively involved in some really good films, TV shows, and other forms of video entertainment.
MNTN bought Maximum Effort Marketing in June 2021, appointing Reynolds as Chief Creative Officer and Dewey as Chief Brand Officer. Maximum Effort is responsible for all the marketing and advertising of Ryan’s other businesses.
Aviation Gin
Aviation Logo
Ryan bought the company on February 21, 2018. Prior to that, the company was not well-known, and the majority of its growth occurred while it was under Ryan’s management. Christian Krogstad and Ryan Magarian owned the company before Ryan Reynolds bought it. It was launched in 2006, and the gin was made in Portland, Oregon.
People just watch the commercials for fun because they are so creative and funny; they are no longer just old commercials; they are little comedy pieces that also work as commercials.
Wrexham AFC
Wrexham AFC Logo
Wrexham Association Football Club is a Wrexham-based Welsh professional association football club. Wrexham AFC is Wales’ oldest football club and the world’s second-oldest professional association football team. It was founded in 1864.
In 2020, Ryan and Rob McEhelnney, a close Hollywood buddy and well-known actor, producer, and screenwriter bought the team. According to the new owners, the purpose of their leadership going forward is to strengthen Wrexham’s ideals and repay the fans for their support and faith.
Ryan Reynolds is the brand ambassador and owner of the telecommunications company after he acquired the ownership stake in 2019. Initially, the company was founded in 2015 by David Glickman and Rizwan Kassim and was a subsidiary of Ultra Mobile.
The company experienced immense growth and popularity after Ryan Reynolds joined in as the public face of the brand and his marketing company created hilarious yet captivating ad campaigns for the telecommunications company, which led to the business winning lots of awards and fan appraisal. The main motto of the brand is to provide affordable yet premium-quality phone and internet service.
1Password
1Password Logo
1Password is a password management software company that was founded in 2006. The corporation received a total of 620 million USD this year, which attracted a lot of attention.
Many well-known celebrities and business leaders have invested in the company, including Deadpool star Ryan Reynolds. He recently became the company’s face for its first-ever ad, which debuted on March 24.
Wealthsimple
Wealthsimple Logo
Wealthsimple is a millennial-focused financial management company established in Toronto. Wealthsimple, founded in 2014 by Michael Katchen, is a trading platform where users may invest in socks, trade them, and even file their taxes.
In 2021, the company obtained a 750 million USD investment. Drake, Michael J. Fox, NBA stars Kelly Olynyk and Dwight Powell, NHL athlete Patrick Marleau, and Green Lantern star Ryan Reynolds are among the many celebrities who have invested in it.
Most celebrities choose not to be a part of the business world and keep their Hollywood career as their main source of income, but some love to get their hands into the business market and experience the corporate world themselves. Not all find success, but some make many smart and well-thought decisions leading to their successful businesses. One of them is Canadian actor Ryan Reynolds. He believes in making small investments and giving smaller companies a chance.
He owns a few startups and has funded many. With his sharp wit and great sense of humour, he has created a popular image for his companies that has helped in the success of the businesses.
FAQs
What companies are owned by Ryan Reynolds?
Ryan Reynolds is the owner of Mint Mobile. He also founded a film production company, Maximum Efforts.
What are Ryan Reynolds’s investments?
Ryan Reynolds has invested in Mint Mobile, Aviation Gin, 1Password, Wealthsimple, Wrexham AFC and Maximum Effort.
How much of Mint Mobile does Ryan Reynolds own?
According to reports Ryan Reynolds owns 20% to 25% of Mint Mobile.
How much did Ryan Reynolds earn from selling Aviation Gin?
Ryan Reynolds sold his gin company called Aviation Gin for a colossal amount of 610 million USD.
What is the net worth of Ryan Reynolds?
Ryan Reynolds’ net worth is estimated to be over $150 million in 2022.
When did Ryan Reynolds buy Wrexham?
Ryan Reynolds and Hollywood actor, producer and screenwriter Rob McEhelnney bought the company in February 2020 and the deal was finalized in 2021.
The article is contributed by Andesh Bhatti – Angel Investor & Founder of Collectcent.
The investment management sector is witnessing what is perhaps its most volatile moment in history. The investment landscape has changed and changed for good at that.
Investment is no longer an exclusive habit of the rich and powerful, but rather one that’s becoming more widely available as new disruptive technologies make it more and more accessible to the general public. In fact, investment opportunities can now be taken advantage of with the tap of a smartphone because of the rise in demand for digitally facilitated, easy-to-understand financial services.
Although all these new technologies have the potential to revolutionise and improve the investment process, artificial intelligence (AI) is the one that offers the most potential. The technology encompasses a wide range of techniques for simulating human-like intelligence on a machine. For investors who have until now ventured on the precarious investment terrain relying primarily on their gut instincts and personal assessments, artificial intelligence offers a whole slew of opportunities.
Gartner predicts that by 2025, artificial intelligence (AI) and data analytics will be used to inform more than 75% of venture capital (VC) and early-stage investor assessments.
The Inner Voice Conundrum and Its AI Resolution
Investors who succeed in their ventures are often believed to have a sharp intuition. That’s because their capacity to make financial decisions is based on largely qualitative data like management expertise, industry cycles, strength of research and development, and labor relations; only after that is it abetted by the quantitative data provided by the financial specifics of any business. However, it’s difficult to measure an inner voice, especially when that voice is developed largely through personal experience. And, of course, it also does not give a guarantee of success. Consequently, the role it plays in investors taking financial decisions is decreasing.
The AI Answer
Rising data analysis capabilities are fast directing early-stage investing strategies away from personal judgment and qualitative decision making and toward a more sophisticated quantitative process. Data from websites like LinkedIn, Crunchbase, and Glassdoor, as well as third-party data marketplaces, will be a big part of this process. They are already giving rise to sophisticated models that can better identify the feasibility, proposal, and prospective outcome of an investment. The result being that questions like when to invest, where to invest, and how much to invest are on the verge of becoming practically automatic.
But that’s on optimizing the quantitative process alone. AI is also enabling the metrics for measuring success based on qualitative factors.
AI technology is renowned for its capabilities of predicting future behaviour and delivering insights into client preferences. Natural language processing AI that can discern features about an individual from real-time or audio recordings can further be used to generate unique profiles, now with barely any human assistance. Based on job history, field experience, and previous business performance, AI algorithms can soon be utilised to estimate the likelihood of investment success reliant on individuals.
AI can be used in three stages of the investment decision making:
Pre-trade
To find and analyse investment opportunities, analysts devote a large amount of time to gathering, sorting, and organising relevant data. Consequently, a substantial part of their efforts is spent on data that is later found to be of little value.
Natural language processing (NLP) AI can handle a big part of this job, as it can take in large amounts of data from multiple sources, scan for trends and patterns, and then assign a score to each relationship it uncovers. Using these tools can significantly minimise the amount of time analysts spend in this phase, allowing them to focus on data that has the greatest potential for better discoveries.
At the moment of truth
Although it is up to the investor to make buying, selling, or holding choices, NLP AIs can assist in this. Relying on AI results blind sightedly is not what most investors are going to buy into. NLP can help explain the drivers of an AI decision engine and give an unbiased report that explains the decision in detail, including all the countervailing elements. This can further enable managers to deep analyse a trade and approve or reject it.
Post-investment
NLP engines can leverage structured data inputs to create performance attribution reports and periodic investor reviews. The technology has the potential to increase the speed, precision, and cost of creating reports based on the performance and strategy of the investments made.
Conclusion
The use of AI by investment managers is quick reaching a point where it could provide a competitive edge for a long time to come, by enabling better investment possibilities as well as increased operational efficiency. Needless to say, it has the potential to revolutionise the investment decision process, and by relation, the world of growth and innovation.
