How Venture Capitalists Create Extreme Wealth

Advertisement

What would you do with an extra million dollars in cash? Retire tomorrow? Buy a new house? Buy a Ferrari? Put it in the bank and massively increase your financial freedom?

Sure, it’s nice to daydream about having an extra million dollars in the bank. But I’m asking you this question because it’s a real-life situation the financial backers of early stage companies – venture capitalists, or “VCs” – often find themselves in.

When it comes to extreme wealth creation, few endeavors can compare to being an owner of a small company that grows large.

An early investor in Microsoft (MSFT) could have made over 9,000% during the 1990s. That type of gain turns every $5,000 invested into $450,000.

The same pattern repeats all the time. Nowadays, Microsoft is a big blue chip, one of the market’s heavyweights. It’s a fixture on the Dow, and just last year, Microsoft was one of its best performers, up 55% (versus 22% for the whole index).

That’s some nice outperformance – but take a look at the best performers in the entire stock market:

The performance gap between these smaller companies and even the very best Dow stock, Apple (AAPL), was enormous.

It only takes one of these big hits to make a huge amount of money in early stage companies.

And that is why in Early Stage Investor we know how critical it is to approach the companies I recommend with a “VC” mindset.

What are venture capitalists? And how do they earn such massive returns?

Venture capitalists are the earliest investors in startup companies. They are the grand slam home run hitters of the investment world. They don’t look to make 300% on their investments. They look to make 3,000%… even 30,000%. Make just one great venture-capital investment and you’ll probably never have to worry about money again.

Venture capitalists have funded nearly every mega-hit technology company you know today: Google, now Alphabet (GOOGL), Facebook (FB), Twitter (TWTR), Uber (UBER), Airbnb, Pinterest (PINS), and the list goes on and on.

Before the public learned about these innovative businesses, venture capitalists were there, performing due diligence and making early investments. By the time regular stock market investors hear about your average technology winner like Google, venture capitalists have made more than 2,000% on their original investments.

And while I don’t recommend non-public companies in my Early Stage Investor portfolio – which will soon include my new Microcap Millionaire Portfolio – we still very much employ a venture capital mindset. We are looking to hit grand slam home runs. We are looking to make hundreds, even thousands of percent returns in the world’s best early stage public companies.

Every Year, One Type of Stock Outperforms

That table I showed you of top-performing stocks in 2019? That same pattern plays out every year.

This type of stock is rarely followed by Wall Street analysts and often ignored by mainstream news outlets. Yet the market’s smallest stocks are also the fastest moving.

These microcap stocks are where I’ve found the best trades of my career:

  • After a friend tipped me off to Ulta Beauty (ULTA), I researched the business, and my Ulta recommendation soared 2,043%!
  • Similarly, com (STMP) rose a rare 2,772%…
  • And Advanced Micro Devices (AMD) grew 2,235% in its earlier days!

As you saw in the chart above, Advanced Micro Devices is now among the best large-cap stocks. But if you want to maximize your stock gains, you want the type of early stage companies we’ll target in my new Microcap Millionaire Portfolio.

Next Wednesday, February 5, I’ll present my Microcap Millionaire strategy to the public. Click here to RSVP for:

  1. The #1 mistake investors are making in the bull market right now, which could end up costing you tens of thousands of dollars. I will show you how to avoid falling into this trap.
  2. The top sectors and industries in which to find microcaps for rare 2,500% gains or more in the years to come.
  3. And details on how to claim my new Microcap Millionaire Portfolio. This is a model portfolio of my nine favorite microcap recommendations to own right now.

P.S. Just a single microcap stock that I recommended in the past could’ve turned $10,000 invested into an extraordinary $277,000.

As any VC can tell you, all it takes is one. So, believe me, my new Microcap Millionaire project is something you won’t want to miss.

Tune in on Wednesday, February 5 to discover the details on my favorite microcap stocks to own right now.

Matt McCall’s MoneyLine Podcast

Click here to listen to Matt McCall’s MoneyLine podcast! This week,  Matt voices his frustrations with economists who are calling for a recession. Is this the year? Or are the hack economists finally correct? Then, Matt unveils a sector that will bring $30 trillion of economic value – three times bigger than the internet.

You can subscribe to this podcast on iTunes, Stitcher, Spotify, or wherever you listen to podcasts.

Learn where Matt McCall sees
huge investment opportunities right now:

How to Make Huge Profits From the Shift to Transportation 2.0

The car as we know it is on the verge of a transformative change not seen since Karl Benz invented it nearly 135 years ago. In fact, the whole transportation sector is now poised for its version of 2.0.

I’m not exaggerating when I say this will lead to trillions of dollars in money sloshing around in the coming decades. What is coming will create one of the five biggest investment opportunities you’ll ever see in your life, no matter when you were born. Learn more here.

Why the Legal Marijuana Industry is Set to Grow More than 10-Fold

Marijuana has been outlawed most everywhere for decades… but now a wave of legalization is starting to sweep the world. This will create massive new markets and massive stock market winners. Learn more here.

How to Cash In on the Biggest Battery Breakthrough in a Century

The next big breakthrough in battery technology is an innovation that will have multi-trillion-dollar economic implications. I can tell you this mega innovation isn’t a matter of “if,” it’s a matter of “when,” and I believe it will go down as one of the greatest inventions of the 21st century.

Those on the right side of this innovation stand to build incredible wealth… just like people did from the creation of the internet and the smartphone. Think of this as your “field guide” for profiting from the next big battery breakthrough. Learn more here.


Article printed from InvestorPlace Media, https://investorplace.com/moneywire/2020/01/how-venture-capitalists-create-extreme-wealth/.

©2024 InvestorPlace Media, LLC