One of the best ways to make money investing is by getting in early. If you can get in on the ground floor of a great company long before the public has access to stock in said company, you could stand to make lots of money when the IPO finally rolls around.
Take the case of Google, for instance. When the tech giant went public in 2004, some 900+ employees became paper millionaires overnight. Wouldn’t you have liked to get in on the action?
Thanks to the Internet, it’s easier than ever to get access to shares in private companies through what’s called the secondary markets. Unfortunately, there’s a catch: you’ve got to have lots of cash to do it… I wrote recently about my failed attempt to buy stock on SecondMarket, a popular online marketplace for buying and selling illiquid assets. To join in the fun, you’ve got to have a net worth or joint net worth of $1 million. Either that, or you’ve got to have an income of at least $200,000 a year. I don’t fall into either category yet. So that’s means I’m out of luck.
Still, if you have lots of cash to burn, and you’re eager to buy stock in a company like Twitter or Zynga, SecondMarket might be a viable option. There are also lots of other companies out there that offer access to shares in private companies. Here’s a handful to name just a few: Campbell Lutyens, Cogent Partners, Probitas Partners and Triago. Where there’s a will (and a lot of capital), there’s always a way to buy stock in a private company. It just takes some persistence.