hi, i’m a small novice investor, i would like to invest or be exposed to the company “impossible foods” (https://www.google.com/url?hl=en&q=https://www.crunchbas…)
since this is a private company i wanted to know how i can get exposure to it in the stock market.
they have 11 investors. if i buy the investors stock will i indirectly be exposed to “impossible foods” as well? Most of the investors are large private venture firms or wealth funds such as google ventures, Temasek Holdings or bill gates.
Infact, from their investors list, the only one I understand who is in the stock market is UBS Group AG (USA). Does it make any sense to buy UBS stock just to gain exposure to “impossible foods” or this is just a drop in the sea as far as UBS holdings?
Are there any other options i do not see?
thanks so much!
The best bet to invest in pre-ipo companies I have found is through Equityzen:- https://equityzen.com/. You can check if it is listed in Equityzen.
But there are number of caveats:
- It is not as liquid as a public limited company. Not easy to sell/buy shares tomorrow.
- Information can be scarce and not as readily available as a public company.
- You need to be an accredited investor. So smaller investors are out.
Because of liquidity and information scarcity, I have decided to stick with publicly traded companies.
Not really sure about your situation, but beware investing in private companies. I once invested and worked in a small corporation selling accounting systems. We were doing rather well, and put nearly $ 200,000 in the bank. I owned a little less than 50% and when the guy who owned more than 50% decided he had enough money to hire programmers and build a product and he fired everyone else, including me. If you don’t own or control 51% of the stock, your stock certificates might look nice framed on your wall, but outside of using as toilet paper, they have little value. Legally you have some rights, but control means everything, including the rights to hire and fire and the rights to set salaries which can drain a bank account in a flash. Its similar to Saul’s account of investing in Chinese companies, where they have no rules protecting minority stockholders and think of you as pests.
When the other stockholders are large companies, you are the small fry swimming with the sharks. Your life expectancy may be rather short.
I have been in a similar situation. Fortunately we agreed on a repurchase agreement prior to actually purchasing the shares. Since these shares are not publicly traded you may have little or no buyers when you want to sell. Our repurchase agreement required the corporation to repurchase the shares at the then current value (determined by an outside firm annually) if requested by the share holder.
This has been effective however you are still subject to risk related to the share valuation.