Thanks for All You've Done
Today, I’m writing a different kind of article. I want to offer you a chance to join a select group of investors and me in an extremely profitable corner of the market that used to be off limits to all but the super wealthy.
But first, I want to thank you.
I know, you’re probably thinking, “What’s he thanking me for? I get these emails for free and yet he’s given me stocks like The Alkaline Water Company that doubled within a few weeks of his recommendation. I should be thanking him.”
No, No, No. Thank You
But you can send me thanks later because I’ve got the podium now. And I’m thanking you because you’ve opened a lot of doors for me.
You see, these days, there are tons of hotshot startup companies that have a great service or product and want to really hit the big time. But they lack the funding to make that final push to really conquer the market and head for an IPO.
So, when a CEO or founder from one of these companies meets a guy like me, a guy with over half a million sophisticated investors reading his investment ideas… well, let’s just say that those C-suite doors fly right open.
“Mr. Williams! Thanks for taking the time to stop by.” “Would you like anything to drink, Mr. Williams?” “How’re you doing today, Mr. Williams? Is it alright if I call you Jason?”
These guys treat me very well. And it’s easy to see the dollar signs in their eyes, but they must not realize it. And some of them must think I’m some naïve doofus or something. Maybe the title “newsletter writer” doesn’t make me sound as savvy as “Morgan Stanley analyst.” But, I’m okay with that.
It gets them to let their guard down. They don’t talk to me like an institutional investor (even though I got my start at one of the biggest institutions on Wall Street). They talk to me like a guy at the bar or your buddy from high school.
Most of them are great. They’re motivated to bring a new product to market, and they’re driven to make their company a success and share that success with the people who help bring it.
But some of them... some of them probably regret opening their office doors to me because they say some outrageous things since they figure I’m not really “Wall Street smart.”
Like this one guy... he’s leading a group of scientists who have an amazing idea. They’ve got proof in the lab that their idea works — but that’s all they’ve got. They don’t actually have the product yet. And they had just started to get engineers in to figure out how to make the dream a reality.
But they were asking for a lot of money and at an incredibly high valuation. So, I asked the question I always ask: “Why aren’t you going after institutional investors for a funding round this big?”
I was expecting one of the usual answers: “We don’t want to lose too much control of the company.” “We really want to have a more diverse shareholder base.” “We just don’t have the institutional connections to make that happen.” I get a lot of differently worded, similar answers.
Mom and Pop Don’t Know Any Better
But this guy... what he said really blew my mind. And maybe it would have slipped right by if I were “just a newsletter writer.” But it didn’t. Keep in mind, I’m talking to the money guy at this point, and the scientists are just listening.
Me: So, you’ve got a really great idea here, and it’s a pretty big funding round. Any reason you decided to look for retail investors instead of going to institutions first?
Him: Well, as you pointed out, it’s a pretty rich valuation, and we’re pre-revenue, so, we just felt that, you know, that if we took this to an institution, that, well, they’d tell us the valuation was too high and we need to, you know, come down, probably a lot, to get them, if they’re going to be an investor. But we feel like retail investors aren’t just in it for a profit. Retail investors, they want to bring a good product to market. And they, you know, they just really want to make a difference more than they want to make a profit...
Me: Not my investors... I mean, you know I used to work for an institution, right? Morgan Stanley...
But the thing is to another person that might have sounded like a really good answer. Retail investors are more gallant than the wicked institutions. And maybe that’s right.
But what I heard him say was, "Ha! If we went to someone smart with this valuation, they’d tell us exactly where to stick it. Retail investors don’t know any better. You’ve just got to make them feel like they’re helping. You know what they say about a fool and his money."
That’s not okay with me. And I made it perfectly clear to him why. You’re not here for the warm fuzzy feeling you get from being suckered into making someone else rich.
Sure, my investors would love to make a difference in the world and make it a better place. But we’re not investing to not make a profit.
But he’s got a point. The terms of private deals are completely foreign languages to most retail investors. So, if you can pitch your seemingly good idea to them and tell a good story, you’re probably going to get a lot of “dumb money” flowing into your accounts.
Who’s really going to read the SEC documents and comb through the corporate structure? And of those who do, how many really understand all that stuff anyway?
All the Cash for None of the Company
Another example is a company that came to me seeking a final funding round before it applied to list on the Nasdaq. The company looked good. It had revenues. It had products. It had a good management team and some great investors behind it.
But the structure would have been terrible for anyone else who invested.
When I read through the SEC documents it had filed, I noticed that the insiders would own about 86% of the company after this fund-raise, and the later investors would own about 14%. But the early investors would have only put up about 10% of the cash to fund the business, while the later ones would have footed 90% of the bill.
How does that break out into a good investment? Think about it another way if that example is a little confusing...
Say you and I buy a vacation place together for $1 million. You pay $900,000 and I pay $100,000. Then I get to use the house 10 months out of the year and you get the remaining two.
Sounds pretty terrible, right? Terrible for you at least. It sounds like a pretty sweet deal for me, though.
Well, that company still managed to raise about $20 million from retail investors.
Sharks Hunt in Murky Waters
And those are just two personal experiences, but I could go on for pages. The bottom line is that there are a lot of people out there who are willing to take advantage of anyone they can.
I know — I used to work with some of them on Wall Street. They’d throw their own grandmother under the bus if it would help them out a little.
But since I used to work with these guys… and since I don’t mind reading SEC filings and analyzing corporate structure… and since I understand those things better than the average investor...
I pose a threat.
I can look at the deals with the eyes of a Wall Street professional and analyze them like I’ve analyzed my own investments over the years. I can look at the structure and see if the early investors are going to get rich and own most of the company while the later investors foot almost all the bills yet only own a fraction of the shares.
And I can warn people to stay away. Or, I can encourage them to invest. And that leads me to the opportunity I wanted to offer you today.
I Love It When a Plan Comes Together
For the past few years, I’ve been working behind the scenes here at our parent company, Angel Publishing, to start a new kind of investing service. It’s something the company has never done in its history, so I had a lot of convincing to do to get my way.
But I kept getting calls about funding companies, and I kept hearing from both good and bad CEOs. And I watched as every one of the companies raised at least some of the money they’d approached me about from retail investors. The good ones typically raised more, but the bad ones still got a lot of money, too.
They were taking advantage of a lot of people. And they were taking advantage of people who really can’t afford to lose 100% of an investment. There were already newsletters hawking these terrible investments as if they were all going to turn into solid gold. Most of them were (and still are) taking a fee from the company before they give a recommendation.
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It contains full details on why dividends are an amazing tool for growing your wealth.
Something needed to change because private investing like this is really an amazing tool to have in your belt. It helps you diversify away from the risk of the public markets (when stocks crashed in March, my private investments held steady). And private investments are part of every wealthy investor’s portfolio.
There are all sorts, from equity in private companies (think of it as owning a stock that doesn’t trade on exchanges), to private debt (like the corporate bonds Apple and Microsoft issue, but that don't sell on the public markets), to private real estate investments (like ownership in an apartment or office building, but not through a publicly traded REIT).
But the thing is those kinds of investments have always been off limits to most people. You had to be an accredited investor to participate. That means you had to have a liquid net worth of $1 million or more, or make over $200,000 a year as an individual or over $350,000 per year as a couple. And most deals had minimum investments in the hundreds of thousands of dollars.
That kept nearly 99% of the investing world out of the most profitable and exciting investments. Imagine having been able to invest in Facebook as a startup or Amazon while it was still running out of a tiny rented office. How exciting would it be to watch that company, your company, grow and evolve and then go public and keep growing and eventually let you retire a multimillionaire?
I can tell you from experience, it's pretty exciting. But up until recently, those kinds of investments were off limits to most of us. However, thanks to a law recently passed by congress, those kinds of investments are now available to every U.S. citizen over the age of 18. And there are no income or net worth restrictions on who can invest.
But that’s led to a lot of folks, like the guy I told you about earlier, coming in to try to fool investors into giving him their money. He’ll get rich whether the company does well or not. But your stock is worth nothing more than toilet paper unless the company is a success.
So, I wanted to offer my services as a guide, to help people sift through all the trash out there and find the real treasures. I wanted to help investors like you find the next Amazon or Instagram before it goes public.
And I also wanted to help the good companies out there be heard above all the clamor of marketing for bogus ideas that will never amount to anything but heartbreak and bankruptcy.
So, after countless meetings to show that I was bringing something different to the table… after showing the kind of companies that come to me with good structures and excellent business models... I finally got permission to launch my new investment advisory service.
Introducing: Main Street Ventures
Main Street Ventures is a first of its kind investment newsletter. It’s all about private investing for the rest of us. And it allows my readers to take advantage of the network of legitimate founders, investors, and entrepreneurs I’ve built over the years. But more important than that, it allows me to share a hand-curated list of pre-IPO investments with people like you.
That’s the opportunity I want to offer today. I want you to be one of the founding members of this landmark service. I want you to get a chance to make the life-changing profits that only come from pre-IPO investing.
I want you to feel the excitement building as you watch your small company grow into a household name. And I want you to know the rush of selling your private shares into an IPO as you make your first successful exit.
I want you to know the thrill (and the massive rewards) that got me hooked after my first private investment and have kept me coming back for decades.
I’m Gonna Make You an Offer (I Hope) You Can’t Refuse
I want to be your guide along the way, helping you avoid the mistakes I made as an early investor, just like I have been here for so many years in the pages of Wealth Daily.
I want to help you find the next Amazon while shares are still getting sold over the table for $0.50. And I want to get you invested in the next Instagram before it gets a massive buyout offer.
And most of all, I want to help you avoid those sharks out there hunting for inexperienced investors to eat alive.
So, if you’re interested in broadening your pool of potential winners, take a little time today and learn more about the service I created to help you navigate the often-murky waters of private investments.
You can check out the presentation I put together by clicking here. I encourage you to spend a few minutes today and watch the whole video. It's pretty entertaining, and I think you'll really enjoy it.
And at the end, there’s a special offer that I’ve put together for you if you decide to become a founding member of Main Street Ventures, because I want to thank you for all the doors you've helped open for me.
I’m looking forward to seeing your name on my list when I send out my next private deal.
To your wealth,
After graduating Cum Laude in finance and economics, Jason designed and analyzed complex projects for the U.S. Army. He made the jump to the private sector as an investment banking analyst at Morgan Stanley, where he eventually led his own team responsible for billions of dollars in daily trading. Jason left Wall Street to found his own investment office and now shares the strategies he used and the network he built with you. Jason is the founder of Main Street Ventures, a pre-IPO investment newsletter, and co-authors The Wealth Advisory income stock newsletter. He also contributes regularly to Wealth Daily. To learn more about Jason, click here.
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