Why You'll Want to Say Goodbye to the Fortune 500 Company and Invest in Startups

If the world's largest corporations don't take action soon, they risk dying out altogether.

It all has to do with one thing: innovation.

The Fortune 500 list was first published in 1955 by Fortune Magazine. Since then, 88% of the list's original companies no longer exist, having merged, gone bankrupt, or fallen from the ranks, according to the American Enterprise Institute.

The list has seen near constant turnover since its founding, with brick-and-mortar companies like Armstrong Rubber, Pacific Vegetable Oil, and Riegel Textile being replaced by tech-focused companies like Facebook, Microsoft, and eBay.

In fact, Forbes Magazine reports that only 50 years ago, the average Fortune 500 life expectancy for a company was 75 years. But today, it's only 15 years... and it's getting shorter.

This tells us a few things:

  1. The public markets change quickly, and they're insanely competitive. Both of these characteristics contribute to high corporate turnover rates.
  2. Even if a company is pulling in major revenue today, there's no guarantee that it'll do the same tomorrow as industries keep changing.
  3. A company's progress and revenue go hand in hand with innovation. If a company isn't willing to develop new, outside-the-box ideas, it won't be able to keep up.

It may sound like a brutal ecosystem... but a dynamic market is a good thing.

Dynamism in the markets is what promotes progress and pushes industries forward, which means only the companies willing to put in the work are going to sit at the top.

The unfortunate truth I see is that too many companies are focused too heavily on the present, instead of taking the time to refocus their energies for the future.

And I'm not the only one.

John Chambers, chair of tech company Cisco, predicts that in the next decade, over 40% of all businesses will go under if they don't "figure out how to change their entire company to accommodate new technologies."

Consulting firm McKinsey & Co. reports that a whopping 80% of business executives believe that their current businesses are at risk... and only 6% think their innovation processes are satisfactory.

Those big corporations had better watch their backs... or else they'll find themselves replaced by startups.

Startups Are the Best Way to Invest in the Future

By their very nature, startups exist to break the mold.

These companies are characterized by innovation, led by teams willing to take extreme leaps of faith, aim high, and challenge themselves to transform the world.

By embracing innovation, they see areas for growth and improvement that no one else does, and they use their creativity, knowledge, and grit to get the job done.

They're just what our markets need to repair broken business models, encourage industry movement, and truly unlock a world of potential.

Because without the constant cycle of new ideas coming from startups, business will be stuck with absolutely nowhere to go.

But it's not just entrepreneurs that can help move the economy forward... Because behind every great startup is a cap table of angel investors.

Investing in startups is one of the most direct and effective ways to turn our dollars into ideas that become businesses that could change the world.

For anyone who hasn't yet joined me on the path to wealth through startup investing, here is a great place to start.

Now's an excellent time to get caught up on startup investing. Because right now, I'm looking at seven opportunities on my Angels & Entrepreneurs Network that could be the next to "change the world." If you're a subscriber, head to the Deal Flow Tracker and check 'em out. If not... just click here to learn more.

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