Your Gateway Into the Ultra-Wealthy Private Equity Investors’ Network

Marc Lichtenfeld By Marc Lichtenfeld, Chief Income Strategist, The Oxford Club

Special

Managing Editor’s Note: On a recent Oxford Club Radio show, Marc interviewed Early Investing co-founder Andy Gordon about an unprecedented opportunity in the private equity markets. While this is not the type of investment we typically cover in Wealthy Retirement, we wanted to share their conversation with you today. Because it offers regular investors the chance to make 10, 20 or even 50 times their money. Check it out below. And be sure to read to the end for details on one specific opportunity that could be extremely lucrative.


Marc Lichtenfeld: Welcome back to Oxford Club Radio, I am Marc Lichtenfeld. Our guest today is Andrew Gordon. He’s the co-founder of Early Investing, a new research service that helps investors get into early startup companies. We’re not talking about investing in stocks. We’re talking about investing in early startup companies

And really exciting things happened for investors when the federal government instituted new rules that allow individual investors – they don’t have to be accredited investors – to invest in private companies. And there’s certainly some moneymaking opportunities. Imagine if you were able to get into Uber or Facebook before the rest of the world did… Andy, let’s go into a little more detail about the rules… how to find the right startup company and how you can actually invest in it.

Andy Gordon: It’s called Title III, Marc, and it was passed by Congress in the Jobs Act of 2012. It took the government over four years to write and issue the enabling regulation… but finally, it’s happened, and it’s big…

Before, investors who weren’t rich were walled off from making investments in companies that could turn out to be the next Google or the next Facebook. But now, you can get into these companies at a very early stage, which means that you’re paying pennies on the dollar for equity… It’s not like Kickstarter… you’re actually getting shares in the company. I’m talking about exposure to the kinds of companies that can give you 10X, 20X, even 100X – that’s 10,000% gains.

The only way you could do this before, besides having a huge bank account, was to write checks for $25,000… $50,000… $100,000… to a venture capital company. But now, you don’t have to write a big check. You register with a portal, and then you can make these investments for as little as $100. It’s easy to get started with a portfolio of a dozen or two dozen of these companies without spending a lot of money.

Marc Lichtenfeld: So, explain these portals. How does it work? How does an investor get started doing this?

Andy Gordon: … The portals are registered with the government… and they have a lot of responsibility. They have to make sure that the startups are legitimate… and provide investors with educational material – there’s a lot that goes into it. But the portals aren’t allowed to give you advice as to which are good companies, in their opinion. So there’s a big gap… where do you get this advice from?

And with First Stage Investor – my new monthly newsletter by Early Investing – we’re filling that gap. We’re the ones who can provide that research… We’re looking at startups on portals and vetting them, talking to the founders, finding out about the products and technology, and doing the research.

Marc Lichtenfeld: … When I do research on a stock, it’s all publicly available information that companies have to provide at least once a quarter in an annual report. They have to file it with the SEC. How about for private companies? What information do they have to give?

Andy Gordon: Fortunately, in order to raise money, these startups have to be fairly forthcoming about their companies to potential investors, whether investors are… venture capital investors or regular, everyday investors.

The name of the game is are they addressing [questions like]… is their technology protected? Have they filed a patent? And how far is their product along? Have they proven that their product or technology is wanted by customers, and will customers pay for it?

… These companies provide not a business plan, but a “pitch deck.” It’s a series of slides that talk about their technology and their product, their growth strategy, and how they plan to monetize. And of course… at the end of the day, they have to show how they can make money – not only that it’s exciting technology. So these are just some of the things we look at when we vet these startups.

Marc Lichtenfeld: Now… can you give us an idea of some of the types of companies you’ve recommended in the past?

Andy Gordon: We’ve recommended companies across the board. So many people think of high-tech companies. A lot of them are – in fact, most of them are. But we’ve also recommended companies doing e-commerce, “Internet of Things” companies (companies that provide smart devices for the home). One of our recent recommendations was a company that makes a terrific brand of iced coffee, the best coffee I’ve ever tasted. Coffee isn’t necessarily high-tech, but this is unusual coffee.

We’ve recommended VR [virtual reality] companies. It’s a new and exciting area with vast growth potential, so a company that looks good in the VR sector really appeals to us. We’re really looking at the gamut and investors should, too… Don’t invest in companies you don’t understand. You really need to understand the sector that you’re investing in.

Marc Lichtenfeld: So, before we let you go, where can people get more information on your research?

Andy Gordon: Sure… one place to go is our free site, Early Investing. We have a lot of useful information for investors, particularly those who are new to the sector. We explain how to get started and the things you should think about when you go onto a portal and look at these companies…

You need to know your way around the angel community, the VC communities and the portals… so you know which portals have the reputation of listing high-quality startups and which portals have a mixed reputation.

And that’s where we come in… Our promise is to give fully vetted, researched recommendations of the startups that we’re most excited about. We provide diversity in our portfolio and promise to give about 20 to 25 recommendations of these startups every year.

Marc Lichtenfeld: All right. Well, thanks so much for joining us. I hope we’ll have you back soon. Maybe after your first 10-bagger.

Andrew Gordon: [Chuckle] Well, that’s going to be very soon, Marc. So thanks a lot. Appreciate it.

 

P.S. If you’re nervous about investing in this new space, don’t worry. Andy and his co-founder Adam Sharp just launched a special new service. It’s designed to help investors navigate the private equity markets. Best of all, you can get started with as little as $100.

If you’re interested in making 10, 20 or even 50 times your money… on opportunities previously reserved for ultra-rich venture capitalists… check out First Stage Investor today.