When’s the best time to invest in a business?
At the very beginning of course, when their value hasn’t even begun to grow.
Now at least, because of the rise of entrepreneurship, the are many opportunities for ordinary people to look to join a growing start up, and what seems like ‘helping out’ in the beginning, to becoming a major shareholder of a behemoth a few years down the line and retire to the sunset whilst you still have all your faculties.
Years ago these types of opportunities were only available to sophisticated Investors who understood the game, which is; diversification and to invest in a few start-ups with diligence.
Biz-find start ups
You know some will go pop and swallow all you invested with no return at all, some will saunter along keeping their value but are waiting for a myriad of things to happen before they bloom sometime this decade, and one, just one, will probably sparkle so brightly that the returns to you will make you skip to the bank and be courted so sycophanticly by the Bank Manager!
These kinds of investments are now open to anyone. If you know your nephew is a genius and you know what he has is very well received, then who will stop you giving him a couple of thousand dollars to keep going?
These Private equity deals are also called private placements, and are highly volatile but are also highly lucrative if you diversify and keep an eye on what is happening. Often all you get is a handshake for your share capital, so it’s best to know the owners of the start up very well and be part of their passion and what their legacy is that they want to achieve.
Great examples of massive successes that started from private placements are:
Uber; the ride sharing taxi app we all hear of from time to time, they were just valued at 51 BILLION USD and has gone up by $7B in just a few months at the end of 2015. Their share price is 44 USD would you like to have just half a percent of that baby in your portfolio!?
Uber on Biz-find
Well you could have had a percentage, as the original investors of Uber were in for penny shares and their investment has now grown by 439,900% meaning; if you invested just 5 years ago say a thousand dollars, today this return on investment will get you a very nice house indeed!
Important to be pragmatic here and remember; these Investors most probably could also cite 10 other start-ups they invested in and they went bust, but they knew this , this is the game!
Often people get lucky and are unbeknownst investors:
Back as far as the early 1990’s a secretary called D’Anne Schjerning moved to a company called Mosaic as she followed her boss from his old company, she was given the same salary even though the move was a promotion of sorts, so to compensate she was also given stock options to which she took little notice of as the 10,000 shares were only half a penny each.
Cut a long story short D’anne continued working there as she loved her job and Mosaic became Netscape and she made 20 years pay in one new issue day on November 28th 1994!
Netscape on Biz-find
Back to today and the opportunities are many more; other pre IPO’s are making ordinary people a lot of money:
• Workday – which expanded from a $434 million private valuation to $15.5 billion as a publicly traded company; a 35x gain.
• Twitter – which rocketed from an estimated $285 million valuation to $18.5 billion today, a 64x gain…
• FireEye – which grew from an $82 million valuation to a $6.7 billion public company, an 81x gain…
You should say but few blogs speak of the ‘cement overshoe companies’ who sink like a lead balloon and often balance out your portfolio, but you knew that right?
One thing we know is the reason why Pre- IPO placements are proving more and more popular is that these start-ups grow with the investors and it is a much more exciting investment field to get into, often because it’s more ground level and you sometimes can be a massive part of watching your buddy’s/son’s/daughter’s/ niece’s company grow each day and learn a lot about yourself and business along the way.
It would be nice to sit on a beach bar in the Maldives and when asked how you ended up with a lovely beach bungalow on your own private island you can say just; ‘I invested 1,000 U.S.D in Biz-find back in 2015”
Whereas one’s typical traditional pension investment portfolio is run by managers and you have little to do with the day to day running of any of the companies you have a small pie of.
So, how can you get “in” on these kinds of private deals like Biz-find and Uber before they grow exponentially?
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