The chasm between the 1% and the rest has never been never more evident than today. For the longest time, people have been unaware of the unique opportunities that the rich and powerful were presented with when it came to increasing their fortunes. Today, technology has removed the veil and allowed billions of people to level up the playing field, with companies like Linqto leading the charge.
Based in California, fintech startup Linqto has been building a platform designed to open the doors of private investment for investors of all backgrounds. By using the platform, users can invest in leading startups like Circle, Ripple, Discord, Bitpay, and Epic Games, with as little as $2,500. In a space in which investors are often required a minimum investment of $100K, Linqto is a game changer that could finally open these private markets to the public.
“Investing in private startups can be one of the most lucrative strategies out there but has always been only accessible to those with inside connections and vast wealth,” says Linqto President Joe Endoso, who recently assumed the position after serving as COO for two years. “We are changing decades of history by making it possible for millions of people to access these markets with conditions that regular people can realistically meet.”
At this time, Linqto is accessible to investors all over the world as long as they meet two conditions: have internet access and be qualified to invest in private equity. With an estimated 5.1B global internet users at this time, the first condition doesn’t really represent much of a barrier. The latter, however, can represent more of a challenge depending on the country the investor is a citizen of, with most governments requiring a minimum net worth, income, or qualifications.
“Unfortunately, regulations are not yet at a point where anyone can be granted access to these markets. This is both due to most of these regulations being quite outdated and also the risks associated with private markets and similar financial instruments,” explains Endoso, a financial veteran with over 30 years of experience with companies like Enverra Capital, OTCXN, and RedBridge Group. “The good news is that lawmakers, especially here in America, are starting to see the need to update these regulations, which is something we are already for.”
The passing of the “Equal Opportunity for All Investors Act” would mean that any American could be recognized as an “accredited investor” by successfully passing a knowledge test. This, combined with the approach taken by Linqto, would translate to virtually any investor being able to access private markets as long as they understand how they operate.
The way in which Linqto makes such an opportunity possible is by taking care of the research and funding aspects of private investing. After selecting and assessing potential mid-to-late-stage startups to invest in, Linqto acquires shares from current and former employees, investors, or advisors willing to sell. These shares are then offered to Linqto users interested in investing, who can then acquire the equivalent number of shares using Special Purpose Vehicles that are protected against bankruptcy.
Linqto’s approach ensures not only that startups can’t refuse specific sales but also makes the selling of shares to Linqto more alluring, as it allows them to access more funding while only adding one investor to its cap table. The result is an investment model that benefits both investors and startups, creating a cycle in which both parties have each other’s best interests in mind.