Maybe you’re thinking, “OK, so why doesn’t everyone invest in later-stage deals?” In fact, with Uber most recently valued at $40 billion, the investor that bought Howard’s stock is already sitting on a gain of about 1,200%. Late-stage investors might not earn 40,000% returns. The investor that bought Howard’s stock from him is a “late-stage” investor. The upside potential can still be very high.Īs we’ve written about before, our business partner, Howard, invested in Uber very early on – when it was valued at just a few million dollars.Įarlier this year, he sold some of the stock he’d acquired for a gain of 40,000%.īasically, he turned every $5,000 he invested into $2 million. They just haven’t gone public yet.Īnd while they’re far less risky than your typical startup investment. These companies might have hundreds or even thousands of employees, and millions of dollars in revenue. “Pre-IPO companies” are private businesses.īut they’re not considered “start-ups” anymore. Which is why they turn to a different type of private investment opportunity. When Facebook went public in 2012, a private investor who’d invested in 2005 made 200,000%.īut some investors don’t like waiting that long to make a return.Īnd others don’t like investing in companies that are young and unproven. That’s one of the golden rules of private equity. The earlier you invest in a start-up, the more money you can make. Big potential returns.īut today I’ll show you another way to invest in private equity: When some people hear the words “Private Equity,” here’s what usually comes to mind: Big risks.
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