Benefits of Venture Investing Part 2: Access Gains
February 3, 2021 | Jeannie Masters
When you imagine the venture capital industry, you might immediately think “high risk,” “exclusive,” and “elite.” While it’s true that this asset class is high-risk/high-reward, serious firms conduct far more diligence than TV would lead you to believe, and venture is an asset any individual accredited investor can own.
There are a number of financial and inspiring reasons to consider adding VC to your investment mix. At AVG, we have compiled a list of five compelling reasons to consider venture investing. Today we will discuss reason number two.
Reason #2: Access Gains That You’ve Previously Been Blocked From
The number of public companies in the U.S. peaked in the late 1990s and has been on a steady decline ever since. If you exclusively invest in public markets, that’s not good news for you. Many companies now experience their “hyper growth” while still private (i.e. pre-IPO). Slack, Lyft, and Uber, are just a few examples of companies with stellar private market growth and lackluster IPOs.
Today, it’s not uncommon for companies to go public with valuations ranging from a billion to tens of billions. If you wait until the IPO to invest, it can be a challenging way to make money. You’ve missed out on all that value creation between the low price and the IPO price. There are ways to participate in venture capital through a large, diversified portfolio that help minimize risk while giving you access to pre-IPO entry prices.
VC TIP #2
As more venture-backed companies delay their IPO or don’t go public at all, VC is an increasingly attractive option for long-term, accredited investors looking to access the value created in the private markets. In addition, owning a larger portfolio of VC investments significantly reduces your risk and improves your chances of investing in home-run winners that would deliver most of your portfolio’s profit.
Financial and Inspiring Reasons to Consider Adding VC to Your Investment Mix
Check out a recent guide, titled Five Compelling Reasons to Start Venture Investing, to discover all five in-depth benefits of adding Venture to your portfolio.
DISRUPTING THE VENTURE INDUSTRY
Alumni Ventures Group (AVG) is democratizing the venture asset class by offering a path for accredited individuals to own an actively managed, diversified venture portfolio (about 20-200 investments per fund), co-investing alongside experienced VC firms.
Not sure if you’re accredited? Here’s how to easily find out.
For Important Disclosure Information, please refer http://avg-funds.com/Disclosures.