Business magnate Warren Buffett is widely regarded as one of the greatest investors of the modern-day world. His seemingly unmatched and consistent value-investing strategies have earned him the title of Oracle of Omaha.

Many of his investing strategies are known, but there is one that is often overlooked yet incredibly important. Its a lot more prevalent in the startup investing world one customer can mean all the difference for a startup but not necessarily for public companies.

What happened: Buffett is one of the best investors in the world, so there are many lessons to be learned. He loves Coke and decided long ago to invest in the Coca-Cola Co.That ended up being one of his best investments ever. Now, he is acquiring Apple Inc.stock and recently switched from a flip phone to an iPhone.

So what strategy is this, and how does that relate to Buffetts love for Coca-Cola? Its called value-added investing, and the general idea behind it is that you should be investing in startups you use, are a customer of and can provide additional value to the company.

For Buffett, one of his longest-held positions is Coca-Cola, which he has owned for over 34 years. He publicly supports the company and is said to drink as much as five cans of Coke a day.

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Buffetts' firm Berkshire Hathaway Inc. began buying shares of Apple in 2016 and is now the companys second-largest shareholder, owning over 5% of the tech giant. Later in 2020, Buffett ditched his $20 flip phone for an iPhone and now also has an iPad. The idea likely wasnt the need for a new phone but rather a statement to support Berkshire Hathaways largest investment.

This idea can be an effective method of investing. In the public markets, investing in companies you use likely is more effective because if you like the company, the odds are that others will, too. But your individual purchase wont move the needle more than likely.

In startups, that certainly is not the case. Startups often rely on funding like venture capital (VC) to keep the company going until it can be profitable. The first customers can be expensive because the brand isnt established, and people will be more hesitant to spend their money. But if you become a buyer and unofficial brand ambassador of a startup you like, that can mean all the difference.

If you regularly buy a product from a startup for a few hundred dollars, then recommend it to a few friends and family, that might produce a few thousand dollars in profitable revenue for them because it didnt cost them money in marketing. That could be the difference between follow-on funding, paying rent that month or just rolling forward the profits to get a few more customers. If you like the product, its likely others will, and this can strengthen your investment thesis in the startup.

As of a few years ago, it wasnt possible for everyday investors to invest in startups, but thats not the case anymore. Now, anyone can go on sites like StartEngine and invest in top startups, including StartEngine itself. StartEngine makes money when you invest on the site, so if you invested in StartEngine and continued to invest in other startups on the site, youre effectively using the same principles as Buffett by using and supporting your investments. Supporting these startup investments helps them and you share in the upside.

Buffett isnt the only investor using this approach. Its popular among startup investors and there are entire firms dedicated to this type of investing. Many VCs will reach out to companies when they find a new product they like to try to invest in, and it has produced some wildly successful results.

While some people can apply this to startups that sell to other businesses, most investors will be looking toward consumer-focused companies like Apple and Coke.

MaxTracker is another startup raising on StartEngine. It makes money selling GPS trackers that are used through an app on your phone. They can help you can keep your kids, car, bike and other belongings safe, and every time you purchase one, it helps get the startup off the ground. The company is valued at under $10 million right now, so if it becomes a unicorn, or billion-dollar company, that could result in substantial gains.

With all of these investments, its important to note they are speculative and illiquid so dont invest more than you can afford to lose. Still, startup investing can be a great way to diversify a portfolio or simply invest in a company you like.

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