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By Kyle Anthony, Benzinga
For most investors, investable assets include public equities, bonds, real estate and even precious metals, such as gold. However, even though they can be lucrative as early-stage investments, private equity investments are not considered part of the investment opportunity for most due to their high capital requirements and limited access.
Linqto is looking to change the investment landscape for retail investors by making investing in private companies as easy and accessible as investing in the public stock market. In doing this, they are widening the investment opportunities available to investors, enabling them to become beneficial participants in the potentially phenomenal growth pre-Initial Public Offering (IPO) firms can experience, resulting in them garnering investment returns beyond what is usually attainable in public markets.
Accessing Private Market Investment With Linqto
With companies in recent times staying private for longer, the opportunity for retail investors to access companies reshaping industries, commerce and societal engagement is regularly decreasing as the leaders of these organizations opt to delay entering public markets. With the wellspring of capital available to these firms through angel investors, venture capital firms and private equity institutions, there is no sense of urgency or enthusiasm to become public entities. As such, the economic benefit that these firms derive from their business model benefits a select few.
Linqto’s investment platform provides retail investors access to high-growth, technology-driven companies that the firm believes will go public or be acquired within 5 years. Linqto conducts in-depth due diligence on the firms it includes on its platform as it invests alongside its investors. By investing first and ensuring that Linqto has skin in the game, the firm can streamline the investment process, making it as easy as pointing and clicking to participate in the investment opportunities presented on their platform. Its focus is on mid-to-late-stage private companies within the technology industry, where selected firms must be generating a minimum revenue with institutional venture capital or private equity investor backing.
Finally, Linqto’s fee structure is a true differentiator, as it is a zero-fee investment management platform. Given that Linqto purchases shares in large quantities from founders, employees and investors, it receives these shares at a negotiated price. Linqto can then make smaller quantities of its shareholdings available to investors at a reasonable markup, thus eliminating the need for further follow-on fees for the investor.
Linqto’s Investment Platform versus Other Self-Directed Investment Platforms
Linqto’s investment platform is solely dedicated to private, pre-IPO investing; once a company on its platform enters the public market, it will transfer the now-public, registered shares of stock into an investor’s brokerage account.
The difference in Linqto’s value proposition is highlighted when contrasted against other self-directed investment platforms. Recently, Charles Schwab Corp. (NYSE: SCHW) announced it would launch a self-directed alternative investments platform for qualified individual investors with assets of more than $5 million. The platform will offer investors access to private equity, venture capital, private credit and long-short exchange funds. Linqto’s approach vastly differs from Charles Schwab's, as its initial minimum investment amount is just $2,500, with subsequent investment amounts being $5,000. Furthermore, Linqto’s platform provides investors access to full equity ownership in companies – not private equity funds. It is important to note that you must be an accredited investor to invest on the platform.*
The difference is even more evident when contrasting Linqto with Robinhood (NASDAQ: HOOD), the popular commission-free stock trading and investing app. Robinhood allows users to invest in publicly traded investment offerings, not pre-IPO offerings. Though Robinhood does allow for ‘pre-IPO orders,’ this is not the same as investing in pre-IPO investments; it is merely Robinhood providing the convenience of entering investor orders before the morning of the IPO. They cannot execute an order until the stock begins officially trading publicly.
Historically, investing in a private company required individuals to invest at least $100,000. Though firms such as Forge Global Holdings (NYSE: FRGE), EquityZen and HIIVE facilitate pre-IPO investing, Linqto says its fee structure is more advantageous to retail investors desiring access to private investment opportunities.
Utilizing Linqto To Access Private Investment Opportunities
For retail investors who have been unable to add non-public investments to their portfolio due to high minimum investments and restrictive fee structures, Linqto is revolutionizing the investment journey in the private market by making it affordable, accessible and easy.
As companies remain private longer, attaining operational scale and achieving significant revenue growth year over year, their investors benefit from the phenomenal growth these firms may experience, resulting in them garnering investment returns far beyond what is usually attainable in public markets.
Linqto desires to provide this opportunity to retail investors through their platform, broadening their investment opportunity set and giving them access to tremendous wealth generation.
Click here to visit the Linqto website and begin your private investing journey.
*In the United States, an accredited investor is someone who has earned $200,000 in gross income the last two years ($300,000 if filing with a spouse or partner), someone who has a net worth of $1,000,000 aside from their primary residence, or someone who holds a valid FINRA Series 7, 65, or 82 license.
Featured photo by Joshua Mayo on Unsplash.
Benzinga is a leading financial media and data provider, known for delivering accurate, timely, and actionable financial information to empower investors and traders.
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