Special Report

Top 3 Private Company Investments for 2022

Cody Shirk

Have you ever made an investment that changed your life?

I’m talking about a big multiple back on your original investment. Instead of making a 25% gain, you made a 25X return.

I’m talking about that kind of investment.

Say you put $1,000 into a company and received a 25% gain… you’d be walking away with $1,250.

But, with a 25X return… you’d be walking away with $25,000.

That’s the kind of investing that I do. I look for opportunities that have the potential for at least a 10X return. I’m not interested in investing in any company unless I think that I can make money that will change my life.

This may sound unbelievable, but I’ve done this many times over. I’ve made dozens of investments over the past decade, with many resulting in enormous returns.

In this report, I’m going to explain exactly how I do it…

Outline some of my most successful investments…

And show you some similar investments you can make right now.

I have no formal investment training. I did not attend an Ivy League school where I could’ve established relationships that would land me a fancy job on Wall Street.

Instead, I grew up in a trailer, became a professional firefighter, and then learned how to invest on my own.

I didn’t buy any stocks, I didn’t flip homes, and I didn’t strike it rich with some lucky gambling bet.

Instead, I learned a very unique type of investing that cost me a lot of money. I literally traveled the world in order to make these unique investments… and I made a ton of mistakes.

Basically, I gave myself an investing education that I couldn’t have gotten anywhere else (and I spent hundreds of thousands of dollars doing it). Today, I’m going to share with you some of what I learned…

There’s a catch, right?

Why would I be telling you my secret of how I started to invest and what the magic formula is?

Well, the truth is that there isn’t a magic formula. The style of my investing is actually pretty simple. It’s just that most people don’t pursue what I do because it appears extremely risky on the outside.

I feel comfortable sharing this with you is because it doesn’t matter if you copy what I do. There is a virtually endless amount of opportunity and essentially no competition.

Okay, so what investing strategy am I talking about?

The Investment Strategy That Changed My Life

I’m a private investor. That means I do not participate in the public stock market.

Well, hardly participate. While I do own some stocks to diversify my wealth, I rarely make trades.

I also own real estate, gold, cryptocurrencies, art, and all kinds of different stores of wealth.

However, I wouldn’t be able to acquire any of those “other” investments if I wasn’t making money through my “main job,” which is private investing.

I identify world-changing trends… then I look for unique privately held startups in those trends that I believe will be successful… then I figure out a way to invest in those companies.

That is obviously an enormous oversimplification, but at the same time, that’s exactly what I do.

This type of investing is usually called “early-stage private investing.” Other forms of private investing include “angel investing,” “seed investing,” and “venture capital.”

Each of those terms refers to something a little bit different, but they all relate to investing in private companies during their early stages of growth.

Until very recently, everyday investors like you and me couldn’t make these kinds of investments.

It was strictly limited to the ultrawealthy.

But recently that all changed.

In 2016, as part of the Jumpstart Our Business Startups (JOBS) Act of 2012, the laws changed so regular investors could participate in early-stage startup deals. Now, you don’t have to have a million dollars or be a high-net-worth client at a Wall Street bank to get in on great venture capital investments.

Gone are the days when the average investor had access to only basic stocks, bonds, and mutual funds.

As an outsider looking in, private investing seems confusing, risky, and intimidating… but it doesn’t have to be.

Just like with anything, a little research can go a long way…

I don’t just pick random companies to invest in. I have a very specific strategy that has paid off for me over the past 10 years.

Here is how it works…

I find a trend that I am 100% convinced is going to be the next big thing. One of those recent trends is cannabis. I was a very early investor in this trend… meaning I invested in legal cannabis companies before they went public.

I first learned that there were investment opportunities in the cannabis industry around 2010. At the time, I was a professional firefighter, so I wasn’t even allowed to consume cannabis, but I knew that this trend was going to be enormous.

How did I know?

Because it was already huge. Consumption of cannabis has been around for thousands of years, and it’s still huge today. However, it was mostly illegal when I started investing.

That sounds extremely risky ,right?

Well, not really. I did so much research that my brain started to hurt. I read about the numerous initiatives going on around the world to legalize cannabis. I read about medical studies where cannabis helped cancer patients. I read about how cannabis helped people sleep. I read about how cannabis helped people with anxiety.

I kept doing research. For almost two years.

I finally got to a point where I was 100% certain that cannabis was going to be big. The only thing that needed to change was public perception and government legislation.

Then that started to happen…

I looked at Gallup and Pew Research polls every year and noticed that year after year, public perception was rapidly changing toward marijuana. In the early 2010s, more than half of the U.S. population believed the plant should be legalized.

That was almost a decade ago. (Today over half of the population has admitted to using marijuana!)

I also kept track of the various states that were pushing forward with bills to either legalize marijuana entirely or make it available to medical patients. These initiatives began to have serious traction.

Today, more than half of the U.S. population lives in a state where you can recreationally consume cannabis. If, for example, you’re living in California, Oregon, or New York, you can eat a cannabis edible just like you can open a can of beer.

My point is that I did so much research on this industry that I realized the trend was already in place. I just had to make my investments…

So, that’s exactly what I did. I started to reach out to the biggest companies in the cannabis industry. At the time, there were barely a dozen and they were easy to get a hold of.

Every single company I reached out to wanted to talk to me. I met with CEOs, visited their indoor grows, and toured processing facilities.

All of these companies were thrilled to show me around… because they knew I was interested in investing.

At that time – which is hard to believe now – there was barely anyone else out there who was interested.

Do you see what I’m explaining here?

Private investing isn’t rocket science. This is a simple concept.

It’s all about noticing a trend before the crowd and then making your investments early on.

Early Bird Gets the Worm

In the early stages of any trend, few companies are doing anything worthwhile. That’s because in order to start any company it takes motivated and focused founders, a distinct business plan, and a lot of money.

This results in very few serious companies at the beginning of any trend.

And so, these early companies get a massive head start on their competition.

Back to the cannabis example…

I knew of several dozen legit, serious cannabis companies. After meeting with many of them, it became obvious who the top players were. So, I invested in those companies.

I made about a dozen investments, and most of those failed.

But… the ones that were successful went on to become parts of billion-dollar public companies.

That resulted in very large returns for my early-stage investments in those cannabis companies.

I did the same exact strategy in the psychedelic medicine world. I was an early investor in Compass Pathways, ATAI Life Sciences, and MindMed. All three of these companies are now public on the Nasdaq, each sporting a billion-dollar-plus valuation.

My investment in MindMed alone earned me a well over 35X return. (And I put a lot more than a couple thousand dollars in that one.)

I invested in those three companies very early because they were, by far, the most well-put-together operations in the medicinal psychedelics industry.

Of course, I made many other psychedelic medicine investments that didn’t fare as well… but the losses from those didn’t even come close to the amount of money I made from the winners.

This is how it works:

  1. Identify and research a trend until you are 100% certain it will be the next big thing.
  2. Go find the top companies in that trend.
  3. Invest in them!

This is what successful early-stage private investors do.

It’s happened with:

  • The internet
  • Cell phones
  • Cryptocurrencies
  • And just about every other big trend that is obvious in hindsight

Now, the question is: What’s the next big trend?

Well, you probably already know about some of them. The problem is that you don’t have enough time and resources to find the best privately held companies within them.

Longevity (antiaging), space, quantum computing, decentralized finance, and so on. These are all early-stage trends that will be huge in the future.

(I’ve been researching a bunch of other trends that I think will be huge, too. But I am still doing my homework on them and won’t be ready with investment opportunities for probably another year or so.)

When it comes to longevity, space, and quantum computing, I have already done all the work. I have traveled to the top research facilities. I am in close communication with the top startup accelerators focused on these trends. I have tracked down entrepreneurs who are building companies in these trends.

So now let’s look at three potentially life-changing private companies that you might want to further investigate…

(Never invested in private companies before? Don’t worry, I’ll cover that in this report as well.)

Private Company Investment for 2022 No. 1
The “Boring” Company Saving Elon Musk Millions

Infinite Composites Inc. is one of those companies that makes something that sounds very boring at first… but is very valuable to an up-and-coming tech industry.

After about a decade-long hiatus, space travel has become very big again. That’s mostly because private companies have begun developing real technologies that are more functional and more economical than government-supported space initiatives.

Jeff Bezos, Elon Musk, Richard Branson, and other wealthy entrepreneurs are spending billions of dollars to create a private space travel market… and to dominate it.

Who will win? Well, we’re not sure yet.

But one thing is very likely: The small private companies that are developing technologies necessary for space travel will likely be acquired by those billionaires’ companies – Blue Origin, SpaceX, and Virgin Galactic – or other big space-related firms.

Some of these companies are already public and have billions of dollars in cash and shares to buy smaller private companies like Infinite Composites.

Infinite Composites manufactures liner-less composite pressure vessels that store fuel for space travel.

It’s no secret that space flight is expensive. A ticket on Virgin Galactic’s “space plane” will cost you upward of $450,000. A big part of that expense has to do with weight…

The cost of sending 1 kilogram (2.2 pounds) into space starts at $8,000… and that’s just to get it into low orbit.

If you want to go to the moon, you’re talking about $1.2 million…. Mars jumps to $2.7 million.

And that is just for a little over 2 pounds…

The average SpaceX Falcon rocket weighs 1.2 million pounds!

It’s a no-brainer that space companies like SpaceX are constantly on the lookout for ways to reduce the weight of the missions. Losing just a little weight can be a huge cost savings at launch.

That’s where Infinite Composites’ pressure vessels come in.

These vessels are more efficient, cost half of what is currently on the market… and weigh less.

Traditional pressure vessels have a metal liner. Infinite’s pressure vessels harness a unique nanoparticle technology that allows them to be liner-less. I won’t bore you with all of the technical details…

What’s important is Infinite vessels reduce the mass of the rocket by 20% – providing cost savings in the millions of dollars.

Better yet, of the two competitors I can find… Infinite Composites achieves efficiency that is 22% higher than its nearest one. This makes this company very attractive for an early-stage investor who is looking to get exposure to the massively growing space industry.

The Tulsa, Oklahoma-based company’s customers already include SpaceX, Blue Origin, NASA, and the U.S. Air Force.

To learn how to invest in Infinite Composites, click here.

 

 

 

Founder(s): Matt Villarreal (CEO) and Michael Tate (COO)
Year Founded: 2010
Trend: Space Technology
Total Funding Amount: $5.4 million
Minimum Investment: $100
Deadline: 4/19/2022
Learn How to Invest Here

Private Company Investment for 2022 No. 2
The Super Recycler

One of the major ecological impacts from the Covid-19 pandemic has been the incredible increase in the use of plastics. Some of this is from medical equipment, but most of this increase is due to the mind-blowing amount of single-use protective wrapped consumer products that we’ve been buying.

As you may know, plastic takes a really long time to decompose… an estimated 450 years. Plastic fills up our landfills and a lot of it makes its way to our oceans. Some estimates say that there will be more plastic than fish in our oceans by 2050.

Since the 1980s, many local recycling programs have been built across the United States. While we have made great progress… plastic still remains a huge issue.

The first part of the problem is the sheer amount of plastic. According to Future Planet:

Every year, more than 380 million tonnes of plastic is produced worldwide. That’s about the same as 2,700,000 blue whales – more than 100 times the weight of the entire blue whale population. Just 16% of plastic waste is recycled to make new plastics, while 40% is sent to landfill, 25% to incineration and 19% is dumped.

The second is there are a number of different types of plastic – and not all are considered “recyclable” by your local recycling plant. I don’t want to bore you with the differences in the types of plastics. What’s important to know is that plastics are numbered based on what’s in them… once you get to those in “the 7’s,” it’s code for they have no idea what’s in them.

If local recycling companies don’t know what’s in them, they can’t break them down. And if they can’t break them down, they can’t be reused. They end up in our landfills and oceans.

So what’s the solution?

Let me introduce Arqlite. This Santa Ana, California-based company’s technology is not only capable of processing the vast majority of plastics… but it processes them together in a new mix that can then be shaped in different ways.

Arqlite’s business doesn’t end there.

Once they have processed the plastic, the company then turns it into other consumer products. The most popular is Smart Gravel.

Smart Gravel is the perfect replacement for almost anything you would use regular gravel for, including (but not limited to) concrete, landscaping and drainage needs, green roofs, and hydroponics (a way to grow plants without soil).

Plus, Smart Gravel is 3x lighter and 10x a better insulator then regular gravel.

Arqlite’s business has two parts. Bit plastic producers pay the company to get rid of their waste… and then Arqlite breaks down and uses that waste to make products like Smart Gravel.

You can already purchase Smart Gravel at major retailers like Home Depot, Walmart, and Amazon.

Better yet, the team is experienced and has been in business since 2015, with their company growing at over 46% month-over-month.

Further, the Los Angeles-area company already has been validated by Techstars, Cemex, and Coca-Cola, which have made investments in the company. This is a great sign for smaller investors, as these larger companies have clearly done their due diligence.

Arqlite is a great example of a company tackling a problem that we all know will become more and more important in the future. That’s why it’s strategic to invest today… before the crowd understands what’s happening.

You can invest today for as little as $100. To learn how, click here.

 

 

 

Founder(s): Sebastian Sajoux, CEO
Year Founded: 2015
Trend: Environmental Tech
Total Funding Amount: $2.6 million
Minimum Investment: $100
Deadline: TBD
Learn How to Invest Here

Private Company Investment for 2022 No. 3
Biotech Startup Meeting Three Huge Needs

Privately held biotech startups – specifically those with defensible intellectual property (IP) – can turn into enormous wins. Some of my best private investments have been with companies that have developed proprietary drug compounds.

As our ability to develop drugs becomes more sophisticated – especially with the use of artificial intelligence (AI) and quantum computing – the “ownership” of certain drug compounds will become even more valuable.

As new biotech companies raise more capital, they’ll use that funding to get their compounds through U.S. Food and Drug Administration (FDA) clinical trials. Moreover, companies that already own certain IP will be able to license out proprietary formulas, providing more than one revenue stream.

This next company I’m going to tell you about will be able to do just that.

Sen-Jam Pharmaceutical has an impressive IP portfolio. The Huntington, N.Y.-based company currently has 25 patents and patents pending for:

  • an oral COVID-19 therapeutic,
  • an opioid withdrawal treatment
  • and an alcohol hangover preventive.

Although those three conditions seem unrelated, they are all treatable with anti-inflammatory drugs – which is what Sen-Jam is focused on.

In December, Sen-Jam partnered with Duke University to begin clinical trials for its oral COVID-19 therapeutic treatment. Any success with this trial could be a game changer for the company (and that’s an understatement).

But I think Sen-Jam’s two other potential treatments could be much more lucrative…

Their opioid withdrawal treatment is particularly interesting. Those addicted to opioids claim that the No. 1 reason why it’s so hard to quit is because of the excruciating pain that accompanies withdrawal. Sen-Jam is, therefore, targeting the inflammation that accompanies withdrawal and causes the pain. In turn, this makes it easier for patients to wean themselves off the opioid.

As we all know, the opioid crisis is an enormous issue. According to the Centers for Disease Control and Prevention (CDC), 136 people die of opioid overdoses every day… and it’s getting worse.

Any success that Sen-Jen has would provide enormous upside for early investors.

The company’s third asset is targeted at the alcohol hangover market, which accounts for over $500 million in lost productivity to businesses every year in the United States. If clinical trials go well, this product would be the only over-the-counter, FDA-approved product for hangover prevention on the market.

Because the treatment could be bought without a prescription, the likelihood of it being acquired by a major player (think Johnson & Johnson or Merck) is high. Major pharmaceutical companies have massive distribution networks, and they are always looking for new OTC products that they can plug into those networks.

The team behind Sen-Jam is impressive, with multiple PhDs and a diverse scientific advisory board. Most importantly, they have built and exited companies before – collectively over $80 million worth.

Sen-Jam is raising a convertible note with a $25 million cap. While the valuation isn’t especially low, the ability for the company to be valued much higher in the future is very realistic.

The minimum investment in Sen-Jam is only $100.

To learn more, click here.

 

 

 

 

Founders: Jim Iversen (CEO), Jackie Iversen (Head of Clinical Development)
Year Founded: 2014
Trend: Healthcare
Total Funding Amount: $2.4 million
Minimum Investment: $100
Deadline: TBD
Learn How to Invest Here

How to Invest in Private Companies

Typically, I like to dive right into things and get my hands dirty. But, in the world of private investing, that strategy will drain your bank account… and leave you high and dry!

Investing in private companies is a game of patience. While new venture capitalists are anxious to jump on deals when they see them, there are defined funding rounds with deadlines, so you have to wait to make that jump.

Don’t let the “fear of missing out” (FOMO) get to you! Take your time.

In the public markets, you can buy and sell shares anytime you want. If you miss a chance to buy Amazon.com Inc. (AMZN) stock today, you can do it tomorrow. Sure, the price may change, but you still have the opportunity to become a shareholder any day the market is open.

That’s not how it works with private companies.

When a private company raises capital, there are different funding rounds: seed round, Series A, Series B, and so on. Once a round of funding is filled, the company’s founders stop raising capital and go back to work, until they run out of money and need more in order to keep growing.

Each round of funding values the company differently, creating a sense of urgency for investors. As a new investor, there is often a sense of missing out, because once a funding round is closed, there may never be a chance to invest in the company again while it’s still private.

Do not get stuck in this trap.

Remember: There is always another deal around every corner!

And, unlike stocks, you can’t just go to your online broker and place a trade.

You’ll have to visit the crowdfunding platform the company is using, register yourself like you would any e-commerce site, and fill out the paperwork.

Each company’s platform will go into full detail on how to deliver your investment… and on how you’ll be contacted and paid once the company “exits” via an initial public offering (IPO) or by being acquired.

So, to make your deals, you’ll need to become familiar with the crowdfunding platforms that the JOBS Act made possible, such as Republic, WeFunder, and SeedInvest.

Your Path to Wealth

This report is just the beginning…

Now that you’re a Venture Capital Digest member, I’ll continue to share with you tips and tricks to private investing… trends I’m tracking… and even deals that catch my eye.

You’ll receive, for free, Venture Capital Digest almost every Tuesday and Thursday… along with regular videos, special reports, and other goodies I’ll produce. Be sure to keep an eye out for all of it!

And if you haven’t already, make sure you add our email address to your safe list.

Regards,

Cody Shirk
Editor, Venture Capital Digest