The Best Way to Find VC-Like Gains

Dear Reader,

The system is rigged against you…

Many readers know I’m an active angel investor. I’ve invested in dozens of deals… Including several that have reached unicorn or even decacorn status. That’s when a company becomes worth more than $1 billion.

And by my own estimations, I’m sitting on returns like 936%, 14,000%, and even 25,000%.

That’s what is possible with private investments. When you invest during a company’s earliest stages of development, you get to go along for the ride as a startup experiences its biggest growth.

That’s not to say there aren’t duds… But with wins like 25,000% to offset any losses, it’s far easier to achieve real life-changing results with these kinds of investments.

But this kind of investing isn’t available to everyone…

Restricted Access

As most retail investors are well aware, not just anyone can access private deals. Normal investors are excluded from investing in private companies because of the Securities and Exchange Commission’s (SEC) accredited investor rule.

The rule says that only accredited investors can invest in private deals. And it defines an accredited investor as someone with a net worth greater than $1 million, or an annual income greater than $200,000.

Many of us have held our breath, hoping that the SEC would reconsider these rules. In fact, in December 2019, it announced it was going to release new language around its accredited investor definition.

We hoped that its updates would lead to a more inclusive definition, opening the door to more retail investors.

Sadly, that didn’t happen.

The SEC did in fact change the definition… But all it did is add people who hold certain securities licenses to the list. As an example, stockbrokers are now considered accredited investors even if they do not earn more than $200k.

Talk about a disappointment.

The SEC expanded those who can access private deals to a larger subset of “insiders” who work in the financial services industry. For most of us, this change meant nothing at all.

And the rule doesn’t make any sense in the first place…

Government Control

Think about it – the federal government is perfectly fine with nonaccredited investors going to the casino and gambling their paychecks away. Why can’t those same people invest in the most promising private companies too?

I do tip my cap to SEC Commissioner Hester Peirce, who spoke out against the accredited investor rule.

And I love what Peirce had to say about this issue: “Why shouldn’t mom and pop retail investors be allowed to invest in private offerings? Why should I, as a regulator, decide what other Americans do with their money?”

She went further, saying, “A person’s economic status may demonstrate an ability to withstand losses, but it certainly does not demonstrate financial sophistication.”

And the problem can all be summed up with her final remarks:

“[Regular Americans] cannot use their experience, local knowledge, education, and investing acumen to build a balanced investment portfolio, to maximize the nest eggs they pass on to their children, or to invest in their communities.”

Amen.

Unfortunately, the millionaires who’ve chaired the SEC up till now haven’t had much motivation to change the status quo for regular Americans.

But there is a small silver lining…

The Silver Lining

This past March, the SEC lifted the cap on Regulation CF (crowdfunding) offerings from $1.07 million to $5 million.

Reg CF refers to “crowdfunding” offerings that allow investors to buy equity in private companies. What sets these deals apart is that they are not subject to accreditation laws. All investors, regardless of accreditation status, are permitted to participate.

$5 million is enough to make a Reg CF deal worth pursuing. As one example, an early stage company called Gumroad completed the first $5 million Reg CF offering. And it raised the entire $5 million in just 24 hours.

This shows us that normal investors are champing at the bit to get access to deals that actually offer them VC-like returns. That’s rare these days.

It’s why I continue to work on my readers’ behalf to try to find exciting opportunities that are available to regular investors. And I’m thrilled to say that I’ve uncovered something new… Another opportunity that right now is even more exciting than crowdfunding deals…

Silicon Valley “Unlocked”

I’ve spent years researching the best ways for my subscribers to gain access to life-changing profits. I want to help my readers reach – and surpass – all their financial goals.

And I discovered a way to do that with companies that have recently gone public… Making them available to all investors, not just the uber-rich.

I call them “Penny IPOs.”

And even better, these companies go public when they’ve still got their biggest growth ahead… It’s like investing in Amazon back in 1997, back before a $486 investment turned into $1 million.

These Penny IPOs are why I’m making the journey back to Silicon Valley. I’m on a mission to uncover the best Penny IPOs out there and build a list of the top companies for my readers.

I want to share all my findings with you. That’s why I’m going to be hosting a special event called Silicon Valley “Unlocked” tonight at 8 p.m. ET.

There, I’ll tell you what I saw in the Valley… And how you can start to profit from Penny IPOs too.

It’s a night you won’t want to miss. So just click right here to guarantee your spot at this event.

I hope to see you tonight!

Regards,

Jeff Brown
Editor, The Bleeding Edge

P.S. I’ll be giving away the name of my top private Penny IPO at Silicon Valley “Unlocked” as a free bonus for tuning in. So please make sure to RSVP.

Like what you’re reading? Send your thoughts to feedback@brownstoneresearch.com.