Saying that the last couple of years have been rough for investors all over the world would be an understatement. Following a 2021 in which the NASDAQ Composite Index, global venture investments, and crypto’s market capitalization reached all-time highs, economic uncertainty quickly became the law of the land as winter arrived. However, while uncertainty is still in the air, there are many reasons for pre-IPO investors to be positive despite the grim outlook.
Back in September, Instacart and Klaviyo became the first unicorns to go public this year, a decision that had been years in the making and followed months of speculation. The move was seen by most investors as an indication that a turning point could be near for the IPO market, especially with late-stage funding going up during the third quarter.
OpenAI, Antropic, and Tempus are some of the companies that have become a beacon of hope for investors thanks to tech giants and venture capitalists keeping a close eye on the AI industry. Bloomberg reported that AI funding raised $17.9 billion during the third quarter of 2023, a climb of 27% compared to the second quarter. This growth was mirrored by the semiconductor industry This trend has been mirrored by the semiconductor industry, which saw a growth of $4.5 billion.
While 2023 remains a challenging year for startups across all industries, even when compared to an already challenging 2022, some startups have been able to defy all odds. Crunchbase found that companies Cava Group, Oddity Tech, Nextracker, Acelyerin, and Apogee Therapeutics all saw their market capitalization surpass their IPO valuation, something that even Instacart failed to achieve.
With much of the data showing that opportunities still abound, organizations like EY believe strong growth prospects, ESG, and profitability are the keys to successfully making it through an IPO. To pre-IPO investors, this means redoubling their due diligence and risk assessment efforts, as well as continuously monitoring their equity.
Factors like high minimum investments and never-ending bureaucracy surrounding private markets have historically made it difficult for savvy pre-IPO investors to efficiently adapt to periods of heightened risk. As such, many of these investors are turning to trading platforms like Linqto to more effectively manage their pre-IPO portfolios, increase their liquidity, broaden their investment opportunities, and accelerate their reactions to changing market conditions.
Founded by former Intuit financial services architect Bill Sarris, Linqto has been developing software solutions for the financial services industry for over 13 years. Today, the company is better known for the self-directed investment platform it launched in 2020, which allows accredited investors around the globe to invest as little as $5K in some of the world’s biggest late-stage pre-IPO startups. The increased demand for Linqto’s services has translated to a growth of over 500% in 2023 alone, with over 426K accredited investors now being registered on the platform.
🎉 Milestone Alert! From 65k members at the start of the year to a massive 300k now. Thanks to our groundbreaking solutions and commitment to Accessibility, Affordability, & Liquidity. A big shoutout to our community for joining this revolution 🌟 #EquityDemocratized pic.twitter.com/afe2OQGF3M
— Linqto (@linqtoinc) September 21, 2023
Linqto offers these users the opportunity to diversify their portfolios by acquiring equity in mid-to-late-stage startups in industries as varied as fintech, healthtech, AI, and sustainable materials. Linqto’s $5k minimum investment, inexistent self-service nature, and inexistent brokerage/management/administrative fees made it easy for migrating investors to adapt their strategies in a manner and speed that private markets haven’t traditionally allowed.
Linqto has further expanded the strategic repertoire and flexibility its users enjoy with the launch of its Alternative Trading System (ATS) earlier this year. This secondary market allows investors to trade equity with same-day settlement instead of waiting for liquidity events like mergers, acquisitions, or IPOs. The result is true liquidity and additional investment opportunities, something pre-IPO investors can’t have enough of right now.
Not only are market data and Linqto’s success clear indications of the pre-IPO markets still going strong but also of a growing disruption in the space. By getting private markets to behave more similarly to markets like stock and crypto, Linqto is just what investors need. After all, while they might be still hot, pre-IPO markets could really benefit from being rekindled by renewed interest and funding.
Featured image credit: Linqto