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There are many reasons to invest in private equity. First and foremost, the private markets have far outperformed the public markets. Over the past 25 years, Private Markets, as represented by CAMBRIDGE ASSOCIATES LLC US VENTURE CAPITAL INDEX, have outperformed public indices over a 25-year time horizon (as of 12/31/23). The average return is about 23% while over the same period, the Nasdaq Composite, Russell 2000 and MSCI All World public indices returned under 10.5% per year.
On a fundamental level, private investments are generally riskier and therefore demand higher returns on investment. In today’s market, companies are staying private for much longer than they used to1. The median age for tech companies going public in 2000 was 4-5 years compared with 12 years in 2018. The returns generated by these companies during their growth phase are only achievable by accessing the private share market. As an investor, this makes it advantageous to gain an earlier entry point to these companies by investing in private company shares.
Learn more about this topic here.
Sources:
1. https://www.hamiltonlane.com/en-us/insight/staying-private-longer
You can begin the investment process by first creating an account, completing the identity verification and accreditation process, and funding your account.
For information on identity verification process, please see our Help Center article.
There is no waiting period once funding is complete; your investment is instantly yours. However, there is a 90-day hold period before potential liquidity is available. This means you must hold the shares for at least 90 days before they can be sold for cash or sold to make another purchase on the platform.
Our current holding period is 90 days. From the date of purchase, members must hold the asset for 90 days before selling and cannot use those shares to purchase another security on the platform. The holding period is subject to change; not all holdings are eligible to sell.
Yes! Once you’ve verified your status as an accredited investor, you can add a Self-Directed IRA, Solo 401k, LLC, Trust, or similar business entity to your profile as a sub-account to act as a separate Purchaser. With the same login credentials, you'll be able to manage the investments made through each separate entity (ie- your individual investments and the investments of your LLC or other entity), and each sub-account will have its own Cash Account for funding. When you would like to invest, you’ll be presented with a dropdown menu where you can choose to invest through your personal account or your LLC/Trust/etc.
Specifically for IRAs, Linqto members can only invest using a Self-directed IRA. Self-directed IRAs provide investors with a much wider range of investment opportunities including alternative investments such as precious metals, real estate, or private placements.
When investing through an entity, all the entity's holdings and investment documents will be issued in the name of that entity and can be accessed at any time from your portfolio.
To add a sub-account, click the "I Want to Add an Entity" button in your Investor Profile and our team will help set that up for you.
Following a liquidity event, the shares of the company may be subject to a lockup period, typically 90- 180 days, or longer for certain shares. This is a period of time after the company completes a public listing during which specified shares are restricted from being sold or transferred. Each exit is unique, so the Linqto Team will keep our investors as informed as possible regarding the potential outcomes, including what distribution option(s) become available, i.e., receiving stock in-kind or cash proceeds, as well as the timeline in which to expect the distribution.
When it comes to companies offered on the Linqto platform, we try to be as informed as possible when selecting opportunities to offer. Even with all of the information we gather, we can never guarantee a company will experience a liquidity event.
Every merger or acquisition is unique, so there are several possibilities that may arise depending on the details. If this happens, our team will guide you through what your options are.
