Just seeing if any of the posters have made any secondary market or off-market investments through boutique brokerages into private companies? Typically several years out of IPO?

Just looking for a feel as I've got an opportunity but looking for a few lessons learned or things to look out for.

Look forward to hearing a few details if possible!

I’m a schlub but I know some people.

Some of these people have some money. They get visits from their GS team. One thing they were in on pre IPO was draftkings. Made a killing.

That’s the extent of my knowledge.

Alternative investments can be very lucrative and rewarding when they hit. On the flip side, you will likely lose your entire investment if it fails. Therefore, conduct your own due diligence. These investments are highly illiquid, so be prepared to buckle up for the ride. You will likely only be able to get out when the company sells or goes public. Depending on the structure of the offer, you may or may not be subject to capital calls.

I feel like a good case study on the negatives can be seen through WeWork. Valued at $47 billion at the top, prepared to IPO but the IPO failed. They ultimately went public via a SPAC but eventually filed BK.

I’ve worked for private companies that were trying to IPO, and seen it go well and poorly.

They tend to give enployees RSOs or “phantom” stock as incentives.  The thing you have to understand is that, until the company is valuated and the IPO process starts, that shit is Monopoly money - they can change it, revalue it, or whatever at the drop of a hat.

If they do IPO, that stuff turns into real stock, but there are blackout periods and quiet periods by SEC rules.

If they’re angling for a LBO or something, generally the Monopoly money either instavests or goes away, based on however the buyout is negotiated, but (I believe) it has to turn into real money at that point, and can’t remain an unfunded liability (I could be wrong on that).

That’s not exactly what you asked, but is peripherally related.

All great points and i appreciate it.

My biggest fear is not the company going bust but some shady deal that wipes me out or makes us worthless.

My gut would be that once a company is big enough or public spotlight, the risk of that starts going down. Could be wrong

Pulled the trigger with a “yes”. Waiting on documents now.

It’s been a wild ride and full of education.

SPV
2/20
0/0

Liquidation events

Preferred vs common.

The stock market is the secondary market.

Ok i'll bite:

From your perspective, why do you say that?

What’s your level of exposure in the market?

What is your background?