Startup Investing Loophole Explained

When Jeremy approached me to share about this “loophole” for startup investing… 

I couldn’t resist.

It has created, what I believe, is one of the most powerful opportunities for wealth creation we’ve ever seen.

And possibly will ever see.

I have a (free) masterclass starting shortly, where I…

Break down this loophole I’m talking about.

Unpack the BIG differences between Pre-IPO investing and Post-IPO investing.

Share how I’m using my absolute favorite strategy to take advantage of the hottest startup investments.

The next session starts soon and registration is limited.

Grab your seat, here while you can.

I’ve packed some of the highlights from the session into a short debriefing that includes a few tips I share with new investors.

 

Unlocking Generational Wealth

 

Chris Graebe here –– CEO of Startup Camp.

I recently teamed up with the Founder of Pre-IPO Buzz to make an exclusive angel investing masterclass.

In this tell-all video, I show you how regular people can get involved in angel investing by using my absolute favorite strategy. 

You will learn about the loophole that makes pre-IPO investing possible, the best strategies for building wealth, and you will see a real startup investment broken down, step-by-step.

In this article, I will go over some of the basics covered in the class. To get the full scoop, reserve your spot in the next presentation of the masterclass.

 

Why Invest in Pre-IPO Companies?

 

Many investors have made millions investing in public companies. Most investors already have this in their arsenal. 

A shocking number of investors have no idea about investing in startups. Pre-IPO companies like these have an incredible return potential and are an excellent vehicle for wealth creation. 

In fact, most of the money that is made investing in companies comes from Pre-IPO companies — long before they go public.

And when it comes to returns, a good year playing the stock market could get you 8% or 12%, whereas pre-IPO investments can yield 100% or 1,000%. 

This is because startup investments are incredibly risky, but with great risk comes great reward.

For those coming from investing in stocks, the transition is easy. It’s the same as buying stocks. You buy stock in the company for maybe $1 or $4 per stock, hoping that someday the stock will be worth $200, post-IPO.

And for those brand new to investing, fear not. Once you understand a few basic concepts you can start investing in startups and getting big returns. 

In the full-length Pre-IPO Masterclass, we show you what you need to get started, investing in real companies for as little as $100.

 

Return Potential on Startups

 

Let’s take a look at some data. This is the return on investment (ROI) of a few types of investments over the last twenty years:

 

Seed Funds

All Venture Funds Hedge Funds Buyout Funds S&P 500 NASDAQ
22.4% 18.7% 18.7% 16.5% 14.9% 13.2%

 

As you can see, seed funds (pre-IPO investments) yield the highest returns. 

A successful angel investment will create huge returns, unlike any other type of security. This makes it uniquely fit for wealth creation as opposed to low-risk, low-return investments like index funds that are mainly for wealth preservation.

 

Why Now? The Pre-IPO Loophole

 

Imagine this — If you had invested $1,000 in Spotify as an angel investor you would have made $1,600,000.

The problem is, you couldn’t have invested at that time. Not unless you were accredited. Unless you were one of a select group of affluent angel investors, you were unable to invest in Spotify or any other country before it went public. 

Today, there are startups with the same potential as Spotify, Airbnb, and Uber. The only difference? Now regular people can invest in them! 

With new legislation changing the rules for startup investing, the barrier to entry is gone. Angel investing has gone from being exclusive and elusive to being an essential part of any modern investors portfolio.

 

Breaking Down a Real Investment Opportunity

 

Now, let’s look at the step-by-step process of investing in a pre-IPO company. 

For this example, we will use a real startup that we offered to our members on StartupCamp

 

1. Finding the Deal

 

This particular startup deal came from MY personal network. 

I was contacted by a founder I knew that was doing some interesting things in the SaaS world. The founder had finished bootstrapping and was ready to scale but didn’t like some of the deals venture capitalists were offering, so he decided to contact me.

Getting access to good deals, also known as deal flow, can be one of the more challenging parts of the angel investing process. We get more in-depth on how to find startup deals in the full masterclass.

 

2. Researching the Startup

 

The company is called Albi. This is an AI-powered meeting software. It links into your Zoom, Slack, Google Hangouts, or other online meeting and listens in on the conversation. 

The software takes a transcript of the meeting, produces action items and follow-up tasks that instantly integrate into your scheduling software, and creates an efficiency report for the meeting.

With this report, you can see who is talking too much or too little, who delivered important information, and how you could make the meeting more efficient to save time and money.

Seeing the clear value of the product and the problem it was solving, we knew we had a good idea on our hands.

 

3. The Pitch

 

We set up a meeting, and the founder of Albi came and gave us his pitch.

We asked questions to see if we liked the vision and terms. When there was a hole in the story we called it out, leaving no stone unturned. 

We did everything we could to make sure the company will benefit us financially and ensured transparency for our members. Only once we knew the deal was right did we present the opportunity to our members.

From there, StartupCamp members got a chance to meet the founder in a Deal Reveal. We explained everything — the potential and the risks — and then gave members a private link to invest.

Any member that liked the deal could invest $100, $250, $50,000 — whatever they want. 

The great thing is that the thousands of people who invest in Albi then go beyond investment and become supporters of the product. They buy the software, bring it to their businesses, recommend it to friends and family, and bring in more customers. 

 

The Key to Investing Success: Deal Flow

 

For angel investors, the most important thing is deal flow.

The returns are high and the doors are wide open, but if you don’t have access to exceptional deals or don’t know how to find them, your chance of success is limited.

Luckily, there are resources that can give you an edge.

Entry into this space has been difficult for many, but we aim to break down those barriers. This benefits startups and investors alike.

The best way for a new angel to get started is by watching the Pre-IPO Masterclass. You will learn everything you need to know to start investing today. 

So, reserve your spot in the next presentation of the masterclass and start your investing adventure.


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