Venture capitalists are incredible people because they take risks all the time. It is estimated that the average American makes about 35,000 decisions every day, but they may just be the quotidian things like what to have for breakfast or which way to the office is best if you don’t want to be stuck in traffic. The biggest financial decision that you might make on a normal day is how much you’d like to spend on lunch, and over the course of a lifetime, you will probably not decide on anything more expensive than your house. However, venture capitalists risk massive amounts of money on small, relatively unknown companies in the hope that they will succeed and start to pay dividends. They have to think about the current market and try to predict how it will change in the future. Things that seem so obviously useful today were once speculative ideas that needed funding. Facebook, for instance, started as a website designed to connect students at Harvard University. It is now worth an estimated $435 billion, and it has made its CEO Mark Zuckerberg a multi-billionaire ($62.8 billion to be exact). Of course, it is too late to invest in Facebook as a start-up, but the next big thing is out there right now waiting to be discovered. Having the knowledge, foresight, and vision to be able to identify that company is what has made venture capitalists like Chris Sacca billionaires in their own right. Sacca managed to see the potential of companies like Twitter and Uber and is now worth just over a billion dollars. If you want to make your name as a genius investor, here are a few industries worth considering:
One option when starting out is to invest your money in safe stocks that you can be sure will give you a return. So-called Blue Chip companies have a reputation for being reliable. They are not likely to go bankrupt because consumers trust them and they have reasonable prices that will ensure that they continue to do business for a long time. However, the only problem with this is that these sorts of stocks will not make you rich. They can make you comfortable and allow you to make enough money each month to support yourself and lead the sort of life one dreams of but you will not become a billionaire. To do that, you have to take bigger chances and inevitably incur losses along the way.
It is said that necessity is the mother of invention. When trying to anticipate which industries or companies are going to a success in the future, you should consider exactly what sorts of needs are going to be felt the strongest in the future. Human beings require a few different things to survive, including basic amenities like food and water. It is for this reason that agricultural companies are considered to be safe investments. The same is true of the housing industry. As the global population continues to increase (the UN anticipates that it will reach 9.7 billion by 2050), the need for houses will increase concomitantly. Another thing that people need is energy. Since the Industrial Revolution, humans have been mining the earth for fuels that they can burn. It acted as a catalyst for civilization, but it also helped instigate global warming. Besides, the use of crude oil is simply not sustainable, not least because of its effect on the environment, but also because it is non-renewable and will run out eventually. Oil discoveries were at a seventy-year low last year while at the same time, we are using at an exponential rate. Since the need for energy is a constant one but its supply is in doubt, new technologies will have to developed.
Many people are already aware of the need for sustainable energy sources but the technology, while impressive in many cases, is still in its infancy. It is for this reason that investing money in companies who are working on the equipment which will power the world in the future is a good idea. As it stands, solar power is quite inefficient. It is physically impossible for a solar panel to be 100% efficient. However, the best ones on the market today have a maximum efficiency of 85%. If they do not move as the sun does, that figure drops to 55%. They also fail to process all of the sunlight that they capture into usable energy. However, advances in battery technology will improve that. Since renewable energy is going to be a crucial part of our infrastructure in the coming decades, you may want to consider finding a battery company. It will be a long term investment but one which could prove prophetic sooner than you may think.
Another thing about which one can be sure as far as the future is concerned is that people will always become old and need care. This will be particularly true in just over a decade. The so-called ‘2030 problem’ will arise because the baby boomer generation is becoming older. It is estimated that by 2030, there will be 61 million Americans between the ages of 66 and 84. This is more than ever before and represents an opportunity. As established and reliable elderly care institutions experience greater demand, they will able to charge more. Investing in elderly care could pay off handsomely in the near future.
Everybody will need to be taken care of when they grow old, just as they will need pharmaceuticals. So-called ‘big pharma’ are a pretty safe better for exactly this reason, but an exciting and still developing industry that could represent a greater opportunity for investment is biotechnology. For instance, Cellect Biotechnology Ltd. recently announced that they had successfully transplanted stem cells. Their stock price increased by 71% in response. As technologies improve, they will become more important in all sorts of medical procedures. Investing now, before the technology has become well known and established, is a good idea.