Gains like these are normally reserved for billionaires… But we’ve found a way for you to get in… And it’s still flying under most ordinary investors’ radars…
In yesterday’s dispatch, I (Chris) told you about one of the most exciting plays we’ve unearthed so far this year here at Legacy Research.
It’s a way to invest in tech startups in the same way as billionaire venture capitalists (“VCs”) – through “private shares.”
In other words, you buy shares in these companies before they “go public” – or are listed on a public stock exchange such as the New York Stock Exchange or the Nasdaq.
Private companies often see huge run-ups before they go public. Buying in early allows you to capture the rocket-ship gains that happen in these high-intensity growth stages.
Take rideshare company Uber. It’s rumored to be going public at $44 to $50 per share. That would give it a market value of $80 billion to $90 billion. In 2010, Uber had a valuation of just $5.4 million.
That’s a jump of 1,481,381% in under a decade.
Or take Uber rival Lyft. Investors who got in early could’ve made 2,067% when the company went public earlier this year.
As we’ve been telling you, these kinds of gains are normally reserved for billionaire VCs.
But today, we’ll show you how you can get into the lucrative world of VC investing while it’s still flying under most ordinary investors’ radars.
| Recommended Link | |||
|
|||
Jeff heads up our Near Future Report and Exponential Tech Investor advisories, which focus on the opportunities in publicly listed tech stocks.
But for his personal account, he also invests as a VC in tech companies that are still in private hands.
And here are just some of the returns he’s racked up in the private-share market…
| Name | Return (Approx.) |
| Ripple Labs | 800% |
| Clubhouse Software | 320% |
| Intabio | 900% |
| InfoSpace | 743% in 3 days |
| Xaucoin | 679% in under a month |
| Abra | 540% so far |
| SkySafe | 625% |
| Grabango | 345% |
| Via | 363% |
| Moltin | 356% |
| CryptoMove | 265% |
| Brave | 1,125% |
And impressive as those gains are, Jeff blew them all away with his stake in cryptocurrency startup ShapeShift. Jeff estimates this position is up 25,000% since he first invested in it.
That’s enough to turn every $10,000 grubstake into $2.51 million.
He got his degree in aeronautical and astronautical engineering from Purdue University, one of the top schools in its field.
Then, for more than 25 years, he worked as a tech industry executive in everything from semiconductors to mobility… to broadcasting and video technology… to IT networking and security… to automotive… and even consumer electronics.
This has given him a depth of knowledge about the tech sector few share. It’s also allowed him to build the kind of high-level contacts you need to even have a shot at the world’s top tech firms while they’re still in private hands.
And that’s not easy to replicate.
But now, there’s a way you can invest alongside the world’s best VC firms without the specialized knowledge and contacts Jeff has spent a lifetime building.
| Recommended Link | |||
|
|||
In March, they added a special kind of fund to the model portfolio at our Palm Beach Letter advisory.
It’s called the SharesPost 100 Fund (PRIVX). And it buys private shares in the same startup companies the world’s best VC firms own on behalf of ordinary investors.
For example, the fund holds private shares in Uber… genetic-testing company 23andMe… and electric scooter and bike rental firm Lime.
It even owns a stake in remittance network Ripple Labs – the same private-share play that handed Jeff 800% gains.
Even better, the SharesPost team buys private shares in these startups when they’re in a sweet spot for growth.
It skips the riskier early venture capital stage… and zooms in on the growth/late-stage period. You can see this period in the blue shaded area of the chart below.
Source: SharesPost
Companies in this phase tend to be more established and focused on revenue growth. They also have lower risk profiles in technology, products, and markets.
And SharesPost’s strategy has been a winner. Here’s Grant with more…
Since it launched in 2014, the SharesPost 100 fund has had 29 “exits.” Meaning it offloaded shares in the tech companies it invested in. Twenty-five of these exits have had positive returns – for an 86% win rate.
For context, the win rate for the average VC hovers between about 10% to 20%. And the average return across the fund’s wins has been close to 100%.
With returns like these… you’d expect there to be big losses in this fund as well as big gains.
It’s insulated investors from the stomach-churning “drawdowns” (peak-to-trough falls) you get in publicly listed stocks.
This next chart compares the monthly drawdowns for the SharesPost 100 Fund since it launched in 2014 (blue bars) with the worst months for the S&P 500 (black bars) and the Dow Jones U.S. Technology Index (green bars).
As you can see, the SharesPost 100 Fund outperformed the S&P 500 and the Dow Jones U.S. Technology Index in 9 out of their 10 worst months.
Now, Grant and Teeka are skeptical guys. And when they first discovered SharesPost, it sounded too good to be true.
After all, boosting your upside potential while slashing your downside risk is the Holy Grail of investing.
Earlier this year, he hopped on a flight from Fort Lauderdale in Florida to San Francisco, where SharesPost is based, to talk to its management team… look them in the eye… and see if they passed the “smell test.”
During his trip, Grant grilled SharesPost’s chief operating officer, Kevin Moss, for two hours. He had one burning question for Moss: Why let everyday investors in on these lucrative private deals?
Here’s what Grant reported back…
When I asked Moss why he decided to cater to the mass market instead of the uber-rich, he told me: It’s an untapped market with huge potential. Hundreds of millions of ordinary investors had no way to get in. And Moss realized his fund could make a fortune giving them access.
It’s hard to fault him on his logic. With the kind of returns on offer in the private-share market, it’s only a matter of time before the wider investing public finds out about it and wants in.
SharesPost is not yet a “one click” play like a stock or an exchange-traded fund (ETF). You can’t just buy it through your regular online broker.
That means it still hasn’t shown up on most folks’ radars.
SharesPost offers three different share classes: a main share class (PRIVX), the institutional share class (PIIVX), and a broker-approved share class (PRLVX).
Teeka and Grant recommend buying PRIVX or PIIVX only.
You want to steer clear of PRLVX, which involves paying commission to buy the fund.
Also keep the following in mind when buying either PIIVX or PRIVX:
-
You can buy PIIVX through a financial advisor. The institutional share class will save you 0.25% in expenses.
-
Or you can buy PRIVX by mail or electronically (go here or here). Do not speak to a broker over the phone, or you’ll be charged a sales load.
For full details on how to buy PRIVX or PIIVX shares, check out this quick two-pager we put together.
We consider this to be a great long-term holding for your portfolio. Remember, the average VC fund has more than doubled the returns of the S&P 500 over 20 to 25 years.
And Grant and Teeka expect SharesPost 100 to do even better than that.
Regards,
Chris Lowe
May 2, 2019
Miami Beach, Florida
P.S. As you’ve seen from our most recent datelines, I’m in Miami Beach for our annual Legacy Research Big Ideas event this week.
Unlike our annual Legacy Investment Summit, where we invite you to join us, this is a closed-door meeting for the Legacy team only. Over three days, we explore our best money-making ideas for the coming months… and come away with breakthrough new recommendations the mainstream has overlooked.
And in future dispatches, I’ll be reporting back on my conversations with guys like Teeka Tiwari… Jeff Clark… Jason Bodner… and Nick Giambruno. So stay tuned.