Pre-IPO Profits

Startup Investments Can Be a Good Inflation Hedge

Startup Investments Can Be a Good Inflation Hedge
By Adam Sharp
Date May 25, 2021

Inflation appears to have arrived in the U.S. I say “appears to have arrived” because in my opinion, we’ve been dealing with at least 6% inflation for more than 5 years. The reason you haven’t heard about that is because the government manipulates the official consumer price index (CPI) numbers to make inflation look much lower. You can read about some of the ways governments make inflation look lower than it really is here on

Whether you look at the official inflation numbers or credible alternatives like ShadowStats, inflation is looking like a real problem. Federal officials tell us the price hikes are “transitory,” which I guess is a fancy way of saying temporary. I don’t agree. I think inflation at these levels could go on for 5-to-10 years — and reach well over 10% per year (officially). 

So… If sustained inflation is going to be part of the economic picture going forward, are startups something we should invest in? I think so. I can’t find any studies or research into the question. But in my view it’s pretty simple — startup investing has extremely high upside if you do it right. 

Venture capitalists have shown us that it’s possible to consistently beat the stock market if you get into the right deals. So in that sense, startups can certainly act as a hedge against inflation. If you can manage to return 15% per year investing in startups over the long run — which I think is very doable — that is a very attractive hedge. 

It’s important to note that you need to make enough investments to give yourself a great chance of hitting some huge winners. I’ve invested in more than 130 startups now. And I suspect about 10 of them will provide 99% of the returns. 

Thanks to sites like, it’s possible to find top tier early-stage private deals online. If you need a refresher on how to get started, be sure to check out the Angel Investing Bible we put together a while back.

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