There are many types of investments out there.
But one of them is my favorite: startups.
After all:
- On average, their returns are nearly 10x higher than stocks.
- It’s exciting to be involved in cutting-edge companies.
- And meanwhile, by investing in startups, you’re helping to create jobs and boost the economy.
What’s not to love?
The thing is, one simple change could make startup investing even better. And last week, it finally started happening.
As you’re about to learn, this one change could give you the chance to make 400x your money — faster than you ever thought possible.
How To Make Startup Profits Even Better
If I had a magic wand, there’s one thing I’d change about startup investing:
I’d make it so I could sell my shares exactly when I wanted to.
You see, startups are young companies. That’s why it generally takes time for them to mature, and time before the successful ones have an “exit.”
An exit happens when a startup gets acquired by a bigger company, or goes public in an IPO. That’s when investors like us make our profits.
Sure, as long-time Crowdability readers already know, some startups have had big exits just months after we’ve introduced them to you…
For example, Elio Motors helped many Crowdability readers make nearly 400% on their money in just 60 days.
But what if a startup you invest in today still has a ways to go before its exit… but you want to cash out now?
Well, traditionally, there wasn’t much you could do.
But now that’s changing…
Selling Your Shares to Other Investors
A moment ago, I told you about the two main ways startup investors earn their profits:
Acquisitions and IPOs.
But there’s also a third way:
Sometimes, startup investors sell their shares to other startup investors.
For example, look at Uber. Several years ago, when Uber was still a startup, our business partner Howard Lindzon invested in it.
Most private investors waited almost a decade to cash out their shares. They waited until Uber (NYSE: UBER) went public.
But Howard was able to sell his shares years before that.
Here’s how he did it…
400x His Money
Uber had many startup investors besides Howard. One of them was Google.
The thing is, Google wanted to own more shares than Uber was willing to sell. So Google offered to buy the shares of early investors like Howard.
That’s why Howard didn’t have to wait for a takeover or an IPO. He was able to sell his shares to another investor — for a windfall.
Specifically, for every $5,000 he invested, he got back about $2 million. That’s 400x his money.
Until recently, this type of exit (it’s called a “secondary” transaction) was only available to wealthy investors.
But now it’s becoming available to all investors, including you.
The First “Stock Market” for Startups
Last week, one of the largest platforms for investing in startups — it’s called StartEngine — officially launched the first SEC-approved secondary market for startup shares.
Here’s how it works:
After investing in a deal on StartEngine — or even a deal from competing platforms like WeFunder or Republic — you’ll be able to offer your shares to other investors.
In other words, as long as another investor wants shares in the startup you’re selling, you’ll be able to cash out of your early-stage investments years before they go public or get acquired.
Essentially, this is like a stock market for startups.
And not only will it put you in position to earn massive returns. But it will put you in position to earn those returns quickly — just like our partner Howard did.
It just launched last week, so activity is still ramping up. But eventually, it could become a thriving market of buyers and sellers — just like the stock market.
To learn more, click here »
Happy investing.
Best Regards,
Founder
Crowdability.com
