Investing in startups at an early stage is a wonderful opportunity for wealth generation. But what if a company didn’t raise via equity crowdfunding? Or what if you missed out? There’s still a way you can get in on some hot startups likely to IPO (and consequently offer huge returns).
If you meet the qualifications to be an accredited investor, there are additional tools that let you get in on startups well on their way to becoming unicorns. What are they? Secondary private market platforms like Forge Global and EquityZen. SharesPost, another popular secondary platform, has in fact recently merged with Forge.
Both platforms are for trading pre-IPO shares of companies that remain privately held. Often these shares come from employees or early investors wishing to trade when otherwise they could not. Examples of such companies include DoorDash and Impossible Foods, now in Series H and Series E rounds of funding respectively. This makes for some serious differentiation within a startup investing portfolio.
As explained by Forge CEO Kelly Rodriques in a Forbes article, “There are 300 private companies worth over $1 billion for a total potential market capitalization of over $1 trillion. And there are another 600 companies worth at least $500 million. While these companies have stayed private longer than companies did in the 1990s, more of them are going public.”
This is a huge opportunity for accredited investors. With sites like Forge Global and EquityZen, you can invest in previously unavailable and untapped companies.
Rodriques goes on to explain, “In an IPO, the only ones who can ride the first day pop are favored clients of the investment banks handling the IPO. They get shares at the IPO price and can sell after the shares rise on that first day. Through our services, insiders can sell at the IPO or before — instead of being locked up for six months.”
Note that all offers on the Forge site have $100k minimums and are exclusive of a 5% transaction fee, making an investment in one of these deals a heavier commitment than the standard Reg CF Deal.
At KingsCrowd, we want to make sure our accredited readership has comprehensive access to the crowdfunding space. And this includes Forge Global. In the next few weeks, we will release a series highlighting some of the hot deals offered on sites like Forge.
We are excited to bring you this expanded coverage of the startup investing space. Stay tuned for the latest Forge deals and, as always, happy investing!
About: Olivia strobl
Olivia comes to KingsCrowd with a background in venture capital and technology. She spent time at Glasswing Ventures, an AI-focused venture fund in Boston, before joining the KingsCrowd team. There she helped develop machine learning algorithms for the opportunity qualification of preseed and seed-stage startup companies. Prior to her time at Glasswing, Olivia worked in a lab studying the neural correlates of attention. She holds a degree in Neuroscience from Wellesley College.