No matter what your child is heading towards now, you have to be prepared to support your child’s dream. What if your child doesn't want to pursue a job and start an innovative business? Don’t you want to fund his/her innovation? Of course yes.
But, you have to save a huge corpus for that. Besides their higher education, building a startup with an intention of making a unicorn is common these days, and such a trend is peaking high. Your child’s dreams should not be suppressed because of a lack of financial support. You can start investing to fund your child’s startup. Here are the basic three investing ways to do the same.
There are various foreign companies investing in India and enhancing their physical presence in India for efficient utilisation of their resources. Not only because of Indian utilities but also due to tax reliefs provided by the Indian government.
Over USD 13 billion was invested in Indian real estate by NRI investors last year. The highest number of property registrations in the last ten years were registered in the months of May and June 2022, demonstrating a strong foundation for sector growth.
It would be one of the best opportunities to invest in your child’s startup for becoming the first angel investor.
Equity shares of the company let you own the company proportionately, due to which you are able to participate in the growth. For example, if you had invested in TCS in 2004 at (approx) ₹120 per share, your one share would have become ₹3390 in 2022 ( data as of 29th November 2022).
So, investing in equity shares of the right companies that have the potential to grow exponentially would be a good option to fund your child’s startup in future. However, you must have a risk tolerance level to invest in equity shares as it is considered a highly risky investment.
If you are not willing to take many risks of investing in equity shares directly, you can pursue the option of investing in the stock market through mutual funds. You can diversify your portfolio as per your risk appetite as asset management companies provide various schemes that give different levels of diversification, such as sectoral, thematic, flexi-cap, small-cap and large caps.
By diversifying your portfolio, you will be able to get exposure to different industries and instruments that help you optimise your returns and minimise your risks. Mutual funds provide switching benefits also, as you can switch your mutual fund schemes into other schemes according to your prevailing financial situation and market.
By investing in the above-mentioned investing ways, you can fund your child’s future startup in an efficient way so that your child does not have to look for seed capital to run their working capital of a business at the initial stage of the business.
Anushka Trivedi is a freelance financial content writer. She can be reached at anushkatrivedi.com