Silicon Valley is Dead (and why that's GREAT news for you)

By Matthew Milner, on Wednesday, January 22, 2020

KKR is one of the most successful investors in the world.

It’s best known for its $25 billion leveraged buyout of RJR Nabisco.

But nowadays, with $208 billion in assets under management, it’s involved in every type of investment under the sun — from energy to infrastructure to real estate.

Recently, however, it’s decided to move into something new…

And as you’re about to learn, you have the opportunity to follow it — and potentially get your hands on a string of 1,000% winners.

On the Hunt for Big Opportunities

Since its founding in 1976, KKR has hunted for the biggest, most profitable opportunities.

Its most recent focus? Private technology startups, like the ones we cover at Crowdability.

That shouldn’t come as a surprise. After all, based on a 25-year study by Cambridge Associates (an investment firm with clients like Bill Gates and the Rockefeller Foundation), a portfolio of such investments has generated annual returns of 55% per year.

That’s nearly 10x higher than the stock market average — and it helps explain why our target return for all of our private investments is 1,000%.

What’s surprising is where KKR is finding these investments…

Finding New Opportunities in Unlikely Places

You might imagine that KKR is searching for companies in tech centers like Silicon Valley.

But nothing could be farther than the truth.

As Dave Welsh, head of KKR’s technology growth-equity division recently reported, "We're finding opportunities in geographies that haven't historically been the most obvious tech hubs.”

More specifically, it’s looking in areas like Florida, the Rocky Mountains, and the Midwest.

Now let me tell you why…

Why Silicon Valley is “Dead” to Savvy Investors

There are three main reasons KKR has decided to look outside of the traditional tech hubs — and three main reasons you should look elsewhere, too.

First and foremost, deals in tech hubs have become too expensive. And if you’re paying too much to get into a deal, your potential profits will be severely limited.

Secondly, nowadays, more startups exist outside of these hubs. The reason for this is simple: cities like San Francisco have become extraordinarily expensive. Living in an apartment the size of a closet might be fine if you just graduated college. But as tech entrepreneurs get older, they’re moving to areas with less expensive (and more spacious) housing to raise their families.

And third, more universities across the U.S. are producing graduates with the type of tech skills that are crucial for fast-growing startups. As Welsh said, "Any city that has a major university or two around it can have good tech talent." So more cities can now spawn tech startups.

These three reasons help explain why KKR just invested in OneStream Software, which is based in Rochester, Michigan; and KnowBe4, in Tampa Bay, Florida.

But enough about KKR…

How can you get in on deals like this?

How to Invest Outside of The Valley

As you learned today, KKR’s new investment strategy involves investing in high-potential technology startups outside of major tech hubs like San Francisco.

Here’s an easy way to invest in similar deals yourself:

Visit our free Deals page here — then, just click on “Location” on the left and filter for untraditional places. Here’s what the filter looks like:

Happy Investing!

P.S. If you’d like to accelerate your success in startup investing, consider signing up for one of our premium research services, like Private Market Profits. That way, you can invest in the same deals that Wayne and I are investing in.

Membership in this service is currently full. But to learn how to secure a spot as soon as one becomes available, call our VIP Member Services department at 1-844-311-3191…

Or click here to schedule an appointment with a VIP Member Representative »

Best Regards,
Matthew Milner
Matthew Milner


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Tags: Silicon Valley

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