Many advisors – and probably all of their clients for that matter – have a story about missing out on a hot initial public offering (IPO).
“If only I had been able to get in on the ground of Amazon, Facebook or Tesla” is how these tales often start. The situation is made worse by the fact that current IPO market is hot and clients are hearing more about early investors cashing on their ability to, well, get in early.
It's understandable why clients are envious. Plenty of hyper-growth companies are coming to market and with that activity comes a spate of news about hedge funds, private equity firms and venture capitalists raking in the bucks because they were involved when the rest of the world hadn't heard about newly public company.
Direct listings and special purpose acquisition companies (SPACS) are intended to democratize the IPO process for the “little guy” and perhaps those vehicles, but those instruments still aren't as plumb as getting on the ground floor or in the early innings.
InvestX flips the script by making private investing accessible to a broader swath of advisors and their clients. The Canadian company “delivers access, liquidity, and innovation to the private equity asset class through investments in Pre-IPO Giants on InvestX GEM, a state-of-the-art trading platform. InvestX empowers broker dealers and advisors with a marketplace, technology and insights for investing and trading in institutional quality private equity without the traditional multimillion-dollar investment minimums.”
Inside the InvestX Model
In plain English, what InvestX does is provide access to pre-IPO companies without pesky investment minimums while making a market in those securities – buying and selling pre-IPO names while providing liquidity and price discovery for what was previously viewed as a hard-to-reach, not liquid asset class.
“For so long, the opportunities created by the many have been realized by the few. Institutions built seemingly insurmountable barriers to entry, putting the "Wall" in Wall Street. Our partnership with InvestX gives Kingswood US the opportunity to invest in dynamic companies before they go public, before their full potential is realized. Our clients can support these companies as they grow, sharing in the journey and the prosperity. I like to call it Venture Capital, Decentralized.” said Douglas Blake, managing director – investment services at Kingswood U.S.
InvestX's roster of now public companies it provided pre-IPO access includes Airbnb, Palantir, Pinterest, Spotify, Lyft and Uber. Waiting in the wings are other familiar names such as 23andMe, HootSuite, Instacart and Nerd Wallet.
InvestX Increasingly Relevant
As noted above, SPACs are one way of delivering the impression that the world of IPOs is freer and fairer. Still, blank-check targets have early investors and their getting sweeter deals than individual investors buying SPAC shares.
For advisors embracing the InvestX platform and their clients, there's some good news in all the SPAC hoopla. InvestX accesses late-stage pre-IPO status in some companies that eventually become blank-check targets with 23andMe and SoFi.
That access is relevant at a time when the number of SPAC IPOs through less than three months of 2021 is almost outpacing the figure from all of last year.
“With the increasing popularity of SPACs, we anticipate more of our portfolio pre-IPOs to take a swift leap to initial public offering in 2021,” notes InvestX.
In other words, with the market littered with SPACs and unicorns (pre-IPO companies worth more than $1 billion), now is an ideal time for advisors to investigate InvestX.