Early phase startups have to deal with this time machine factor quite often especially if it’s an innovative or out of the box idea that’s slightly parallel to everything else out there.There are a lot of factors that could be behind this but the bottom line is, sometimes the market is either just not ready yet (perhaps warming up) or already over what a startup has to offer. In a few cases, a startup may have already missed the bus on what they planned to go to market with, but more often, a startup can be ahead of it’s time.
Tips for first time angel investors or crowdfunding:
•If the startup is ahead of its time and the market is not reacting at the expected rate yet, factor in the waiting or slow ramp up period in the amount you invest and your expectations on how your investment could grow.
•If it appears that the market is already responding very quickly to the offering or others similar to it, then you may need to consider if this market has already peaked.
•Spot very late entrants who may not have a shot at competing in a market that’s already saturated.