A Start-Up Secret: Invest in These Ventures

The stock market has been off to a rocky start this year as interest rates increased, oil prices dropped to a price they haven’t hit for over a decade, and China’s economy remains volatile.

As venture capital funding has slightly receded, analyst Richard Sherman of Edison Investment has a tip on how to know whether or not an investment in a new start-up is worthwhile. According to Sherman, “A company that relies on the (Internet) must have at least 60 percent market share, or be at least double the size of its nearest rivals to begin really making a profit.”

It goes without saying that there are always exceptions to the rule, but this is a constant trend in deciphering the real unicorns like Facebook, GoPro, Twitter, etc. from the companies that eventually tank.