Dear Startup Investor,
My colleague Andy Gordon and I are hard at work preparing another pre-IPO fund for Startup Investor members. We are planning to launch within the next 45 days.
If you aren’t familiar with the term “pre-IPO,” it refers to later-stage companies that are still private.
One of our core beliefs is that as companies continue to stay private for longer, accredited investors seeking growth should diversify into private investments. It’s practically the only way to add “hyper-growth” stage companies to your portfolio. For more on why companies are staying private for longer, see this recent article I wrote for Early Investing.
In Startup Investor‘s last pre-IPO fund, members acquired approximately $3.1 million worth of shares in the following companies:
- Lyft: This is Uber’s competitor in the ridesharing space that recently raised $500 million from GM at a $5.5 billion valuation. We acquired shares for around half that.
- Instacart: Named “America’s Most Promising Company” by Forbes last year, Instacart employs an army of contract shoppers who pick up groceries.
- Dropbox: With more than 300 million users, Dropbox recently hinted at an IPO in 2017.
- Spotify: Since our funds invested, Spotify has gone on to raise money at an $8 billion valuation, approximately double the price SUI members paid.
- Bonobos: This is a leading e-commerce business in the fashion sector.
- INRIX: This an advanced traffic, mapping and logistics company.
- Prosper Marketplace: This is a leading peer-to-peer lending site.
- Practice Fusion: This is a leading electronic health records provider.
- Birchbox: This is a fast-growing e-commerce business with recurring revenue.
- Kik: This is a company focused on private secure messaging that’s backed by top venture capital firm Union Square Ventures.
- Pinterest: This is a leading social network popular among millennials (particularly women, a highly desirable demographic).
- Acquia: This is a cloud-based content management system that powers websites.
- Meetup: This is a popular social media site enabling real-world meetups.
- Honest Company: This a company founded by Jessica Alba that provides natural home products.
These are some of the fastest-growing companies in the world. And they’re not available on public markets.
This next fund will likely target some of the same investments. But we won’t know exactly which companies are in the funds until they’re closed. We will work with our trusted partners at MicroVentures to find the best opportunities available. You will be notified of investments after they are made. These shares will be acquired on “secondary” markets. Shares may be acquired from early investors or employees who have stock options.
We have arranged for a 20% discount on administrative fees for Startup Investor members. This fund will be available only to our members.
Reminder: Even though these are considered pre-IPO investments, they may take years to become liquid (when you can sell). If a company IPOs, you’ll be able to decide whether you want to keep shares or sell them on the open market. If the company is acquired, you’ll receive your share of the payout shortly after.
Summary
Estimated launch date: October 1, 2016
Minimum investment: $10,000
Expected companies in each fund: 8 to 12
We’ll let you know more as we get closer to launching this exciting new fund.
Best regards,
Adam
P.S. I told some of you at recent conferences about a specific opportunity involving a “smart” surgical drill company. We’re still working on it, but the deal may not come to pass. It has been approached by a number of companies seeking an acquisition. We’ll keep you updated.
Startup Investor Portfolio
