Late-Stage Investing Explained
Jul 09, 2020
Knowing When To Play Your Hand With A Bold Entrepreneur
When it comes to startups and entrepreneurs, it can be difficult to determine just when the right investment opportunity will arrive. We’ve seen the world virtually collapse before our very eyes in the span of just a few months. And now, in the post-COVID aftermath, you can expect businesses, startups, and entrepreneurs to put forth a new business model – one designed for a new world that we’re emerging into. With that in mind, how can you be sure that these new business models are viable? How can you be sure that these new business models are going to stick? You can’t!
While that level of risk certainly goes hand in hand with being an investor, there is a way for you to take advantage of these new and innovative business models, and we’ve spoken about it extensively throughout this series. By waiting until a late-stage investment opportunity opens up, you can improve the success probability of your next investment.
Understanding the life-cycle of venture capital
As an investor in ventures, it is crucial to understand the different stages a startup goes through. FFF – friends, family, and fools or business angels typically back the entrepreneur’s first steps, followed by venture capitalists. VCs usually accompany a venture from the early-stage through its major revenue growth phase, which mostly includes breaking-even, and into its expansion phase. But this also means taking on major default risks.
At the expansion stage, there is an overlap where private equity companies step in since the major default risk lies in the past. Stepping in a late-stage means reduced risk, increased predictability but still having the exit as revenue driver ahead.
PE companies make up the majority of late-stage capital and typically have a very exclusive investor circle. Breaking into those circles either needs a considerably large investment amount or a network which most of us only can dream about.
Late-Stage Venture Is Still Venture
For these new businesses to succeed, they’re still going to require venture capital. In terms of building, growing, and scaling, your investment can make a tremendous impact on these emerging businesses in the immediate future and over the long-term. There are several companies out there that have already made a name for themselves, but they’re still looking for more.
This is precisely where you and your investment can come into play. With a product that’s already established, a brand that’s already recognized, a product that’s already been brought to market, and a customer base ready for more, you can rest assured knowing that your venture capital isn’t going to simply aid in the discovery of a new business model, but it’ll be used to fuel the growth of this business and build on the success it’s already had.
Don’t forget about that study conducted by John Cochrane from the NBER, returns for late-stage venture investments can be six times higher than returns on the S&P 500. There’s an opportunity for a high return, and an opportunity to be the investor who took a risk on a new business model – one designed specifically with the future of business and economics in mind.
Here at Stableton it is our mission to break down entry barriers to private markets and are giving access to exclusive late-stage venture deals with investment amounts as low as CHF 10’000.
We work with individual investors, institutions, and investment professionals to deliver these outstanding opportunities. Contact us today to learn more about late-stage venture investing.
Get notified about new deals!
Sign up here
*Disclaimer: The above article is for educational purposes only and does neither constitute investment advice nor should it be considered to be an invitation or recommendation to buy securities or any other investment products. Please consult your financial advisor about the risks and opportunities prior to making investment decisions. By clicking on that link you confirm that you are a resident of Switzerland and a Qualified Investor according to the new Swiss legislation on collective investment schemes (CISA and CISO).
More from Stableton
The World Is Changing – The Transition To Contactless Payment Is Real
Marqeta is the premier payment issuer and processor behind Affirm, DoorDash, Instacart, Square, and Uber. With operations in Canada, Europe, Australia, and the US, Marqeta is strategically positioned for a successful IPO. A recent profile from Business Insider outlined Marqeta’s steady growth throughout the last number of years, highlighting its $260 million funding round back in 2019.
Aug 11, 2020
The Benefits of Portfolio Products & Venture Capital Funds
When it comes to the world of investing, there are a wide variety of ways to go about maximizing your return. Here at Stableton, we offer our members opportunities across an expansive range of investment styles and approaches. But today, we’re going to talk about a unique type of opportunity that revolves around portfolio products in the form of a venture capital funds – and in particular, a secondary in a leading Swiss venture capital fund
Aug 04, 2020
The World of Cashless Payments
When it comes to contactless payment, the industry is being disrupted by a brand new pre-IPO company looking to bring forth a new payment issuing and processing solution. But before we get to that company, let’s talk a bit about the market in general. After all, the world of cashless payment is certainly becoming more and more like the solution it’s been said to be for so long. But are consumers really okay with that? Well, we can simply take a look at some of the companies that use cashless payment solutions to get some insight.
Jul 24, 2020
Subscribe to our Newsletter
Receive the latest news from Stableton.
We hate spam as much as you do.