Have you heard that not all stocks are the same and you need different methods to value them properly?

The reason is closely linked to the lifecycle of companies and there are four stages.

But are all stages worthwhile to put your investments? At what stage is your risk manageable and the reward substantial to generate a decent investment return?

The Lifecycle Of Companies

  1. Startup

The probability of a business failing is the highest in the first 3 years of operations. Many companies have to test the demand for their products or services in the marketplace. Those businesses which gained traction would be able to survive while the rest would fade away eventually.

The angel investors and venture capitalists are willing to put money in start ups as the gains can be astronomical if the businesses become successful.

The failure rate is so high that often investors spread their capital …