Linqto Enables Individual Investors to Access Profitable Pre-IPO Companies
TL;DR
Investing in pre-IPO companies provides potential for higher returns than public markets, offering a competitive advantage to individual investors.
Linqto provides a platform for individual investors to access pre-IPO companies, with due diligence and specific criteria for both companies and investors.
Investing in private pre-IPO companies can diversify investment portfolios and potentially lead to higher returns, contributing to a better financial future for investors.
Linqto's unique value proposition offers individual investors access to pre-IPO companies with no fees, making it an attractive opportunity for those seeking alternative investments.
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Private companies are historically more profitable and valued lower than their public counterparts, according to research from Bain & Company and the Federal Reserve of San Francisco. This dynamic presents a lucrative investment opportunity that Linqto, a San Jose-based digital platform, is bringing to individual investors.
The core distinction between public and private companies lies in accessibility. Public companies trade on exchanges like the NYSE or NASDAQ, while investing in private companies before an initial public offering (IPO) has been largely exclusive to venture capitalists, hedge funds, and private equity managers. Linqto aims to change this by breaking down significant barriers to pre-IPO investments.
Historically, only investors with substantial capital could participate in pre-IPO funding rounds, often requiring commitments ranging from several hundred thousand to millions of dollars. Linqto disrupts this model by offering entry points to individual investors with minimum investments starting at $2,500, with subsequent investments requiring at least $5,000.
Linqto's platform stands out for not charging any fees to investors. Instead, it operates as a registered broker/dealer with the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA), earning revenue through modest markups on transactions. This fee structure contrasts with other platforms that impose various brokerage and management fees.
Another compelling aspect of Linqto is the level of control it offers to investors. Unlike some platforms that bundle investments into funds, Linqto allows investors to individually select the companies they want to invest in. The platform focuses on sectors like artificial intelligence, blockchain, digital assets, enterprise software, networking and IoT, hardware, and FinTech.
To ensure the quality of investments, Linqto subjects every company on its platform to rigorous due diligence. Companies must be well beyond the startup phase, generating substantial revenue, and backed by institutional investors such as venture capital or private equity firms.
However, access to Linqto's platform is limited to accredited investors. According to the SEC, this includes individuals with liquid assets of at least $1 million, excluding their primary residence, or those with an annual income of at least $200,000 ($300,000 if filing jointly) for the past two years. Additionally, financial professionals holding certain FINRA securities licenses may qualify as accredited investors.
Including private investments in a diversified portfolio offers the potential to reduce overall risk. The returns of private and public assets are not perfectly correlated, which can enhance portfolio performance. Linqto's platform could help individual investors achieve greater returns by investing in companies poised for significant growth, potentially identifying the next major success story akin to Apple.
Curated from News Direct
