Invested in company via venture capital

[corn18]

I did something yesterday that is out of the norm for me, being an index investor. Put 5% of my portfolio into a VC company as part of a series B funding round for a startup company. Could turn into $0, but it could return 40x or more. $100,000 x 40 is a lot of money. Since it's only 5% of my portfolio, I can afford to lose it all, but if it works out as planned, it is life changing money.

Anyone else doing any private capital investing?

[kork13]

I saw your discussion about this over on the ER forum, and I'm curious how you got connected with the VC firm. I've mentioned it in another thread, but I'd love to start investing in small companies like that at some point.

[corn18]

I saw your discussion about this over on the ER forum, and I'm curious how you got connected with the VC firm. I've mentioned it in another thread, but I'd love to start investing in small companies like that at some point.

The connection was made by a close friend. He's a high net worth investor and is connected into that area. No way I get in on this without him making the connection for me. While I am considered an accredited investor, I am not on anyone's VC radar. My $100k investment is a drop in their very big bucket.

[kork13]

I figured that's how you got there. I've been around comparable offers in the real estate space, but only because I've gotten into a RE investors group centered around my alma mater. I'm not financially ready for that yet, so I haven't been able to jump into the pool. But the VC world seems very much like a "who you know" space.

[disneysteve]

Good luck with that. It must have been buried in the fine print of your personal investment plan .

I have not gotten involved with anything of the sort but also don't feel we're in a position to do so. Not sure I would anyway as it's not my sort of thing risk-wise but one never knows. If the right opportunity presented itself and I felt we could afford the risk, I might do it.

[scfr]

No, but I understand the itch. I would love to invest in a movie. One of DH's friends, after he handed over the reigns of his company to his children and supposedly "retired," bought a couple condos that he rents out, and entered partnerships that have invested in commercial real estate and an orchard. He just loves business and doesn't want to stop.

[LivingAlmostLarge]

Sounds like an amazing opportunity. What percentage did you get for $100k in series b? How much have they grown from angel investing to series A and to B? What was the valuation? The diluation will matter when they sell. They will either series C or buyout would be faster than waiting on an ipo

[james.hendrickson]

While are on this topic, I was able to get 4 free shares in StartEngine, which is a platform for early stage start ups looking for funding. So if you like the idea, there are platforms where you can do it pretty easily.

A lot can go wrong with starting a business. It requires a tremendous amount of skill, mental stamina, effort, and good decision making. But, Kork is right, if it goes well, you can make x40 your money. It's just...there is more risk involved than say investing in treasury bonds or the S&P.

[bjl584]

I did something yesterday that is out of the norm for me, being an index investor. Put 5% of my portfolio into a VC company as part of a series B funding round for a startup company. Could turn into $0, but it could return 40x or more. $100,000 x 40 is a lot of money. Since it's only 5% of my portfolio, I can afford to lose it all, but if it works out as planned, it is life changing money.

Anyone else doing any private capital investing?

I'm wondering how this turned out and how this investment is going.

[Bozzdivine]

I'm also interested in that. I haven't yet ventured into private capital investing myself and the OP post has sparked my interest. I'd be curious to hear more about the OP's experiences.