It’s a huge opportunity, but I know it’s new to a lot of folks and not well understood.
In fact, I estimate that nine out of 10 Americans are not familiar with this powerful wealth-building tool.
That’s because it wasn’t available to anyone but the ultra-rich for nearly 90 years.
But it is now … and I believe every investor should put some of their portfolio in private equity deals.
They give you strong diversification along with the opportunity to make money — potentially a lot of money.
I explained it all in a special webinar last night. A lot of your fellow investors joined us, and we had a great time. If you were with us, I hope you’re still as excited about the opportunity as I am. If you weren’t, I invite you to watch the replay now while it’s still available.
As part of the webinar, I answered questions from others like you who are interested in this opportunity and wanting to understand it better. That’s smart.
Let me try to help by answering five of the top questions I received …
- Why should someone who’s been a lifelong stock and bond investor invest in private companies?
If you’re only investing in stocks and not diversifying with private companies, you’re overlooking one of the top wealth secrets of the super-rich.
Those who were first to back Facebook (NASDAQ:FB) made a 1,200-fold gain.
People who bought private shares of Groupon (NASDAQ:GRPN) saw a 520-fold winner.
And if you took part in the private seed round of WhatsApp, you would’ve made a 2,750-fold return.
The best stocks today were at private companies at one point. And as you’ve heard me say many times before, the earlier you invest in a breakthrough business, the more money will be made. Private businesses are as early in the investment process you can get.
You may never see a 500-fold gain with a stock, but these gains are happening with private ventures.
I would add that in a year that has shown us how crazy the stock market can be, it’s just smart to take advantage of big-potential investments that are not dependent on the market.
- Do I have to be an accredited investor to invest in private deals?
The short answer is, no. Historically, that was the case. Only accredited investors could buy into private companies.
Year after year after year, the rich and connected have used private investing to make hundreds of billions of dollars … getting access to deals that the average person could only dream about.
Recent government decisions have opened this asset class to mainstream investors. Anyone can take part in these deals.
I see this as the beginning of an investing revolution that’s starting to take root… and now is a great time to get started.
- Is there a minimum investment amount?
Yes. It is determined by each company accepting investors. There is no mandated universal minimum, but they are typically less than $500. Some are closer to $1,000.
The reason is simple. Private businesses want to raise funds from investors who are serious.
Only so many private shares can be sold, so they don’t want to open this opportunity to people who can’t take advantage of it in a meaningful way.
- What if I’m not sure I can do this different form of investing?
I understand, which is why I want to do my best to explain how it works.
It’s also why I’ve started Private Deal Group, which is designed to help someone who has never purchased a private share in his or her life.
If you are a complete beginner, you don’t have to worry. You have the same ability to benefit from this research service as a seasoned professional.
We provide all the research and how-to guides for you. It’s as simple as private equity research can get. For example, I recorded five videos to explain everything you need to begin your journey of investing in private businesses … from the easiest way to invest in private shares to the simplest way to track them.
To be honest, the online accounts are about as easy to set up and maintain as your Amazon account. The mechanics are easy. The most important part is vetting the companies and going after those with the biggest potential and the highest likelihood of success.
- Is it possible for private deals to go public on the open markets?
Yes. They don’t all end up going that route, but it’s definitely possible. In fact, it happened recently.
An electric car company called Arcimoto launched in 2017 as a private venture. But it didn’t take long for Arcimoto to go public on the Nasdaq. Since then, Arcimoto’s stock, which trades with the symbol “FUV,” has soared 692%.
Investors who got in on private shares likely did much, much better.
It was the same situation with Chicken Soup for the Soul Entertainment (NASDAQ:CSSE). You’re probably familiar with the popular book series. This company owns the video rights of the book series.
It decided to raise money from investors as a private venture instead of going public. But once it went public, CSSE nearly doubled over a four-month period earlier this year.
To be clear, there’s no guarantee that a private company will go public after you invest in it, but any private venture we research in Private Deal Group could eventually go public on a major stock exchange.
And as is always the case, the earliest investors — those who buy private shares — almost always come out ahead compared to those who just buy stocks.
That’s why backing private businesses is the highest upside investment you can possibly have.
On the date of publication, Matthew McCall did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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