Two New Ways To "Cash-in" on Start-ups

By Matthew Milner, on Wednesday, September 27, 2017

Let’s say you bought some shares of Amazon a year ago…

With the stock up nearly 20%, you decide to take your profits.

So you log into your brokerage account, click “sell” — and in a flash, your shares are sold on the Nasdaq and turned into cash.

That’s how you take profits in a publicly-traded company.

But how do you take your profits in a start-up?

In the start-up world, there’s no such thing as a stock exchange, and there’s no “sell” button. Once you invest, your money might be locked up for years.

But as you’ll learn today, two new innovations have recently emerged…

And they can make cashing-out of your start-up shares as easy as 1-2-3.

Taking Profits Off The Table

Before I show you these new innovations, let me quickly explain the two main ways you get your money back after investing in a private company:

IPO:  If a start-up turns into a big, successful enterprise, it can go public in an IPO. When it starts trading on an exchange like the NASDAQ, you can sell your shares.

M&A:  When a start-up gets acquired by a bigger company, you’ll receive your piece of the profits.

Start-up investors can earn enormous profits from IPOs and M&A, but it can take many years to get there.

For example, Facebook was founded in 2004, but didn’t go public until 2012 — so its earliest investors had to wait about eight years to earn their returns.

Wouldn’t it be great if you could cash out of your start-up shares more quickly?

Now you can — and there are two ways to do so.

Cash-Out Strategy #1: Sell to a Strategic Investor

Last summer, a beauty start-up called “Blow LTD” raised about $1 million from investors like you.

Blow LTD offers “on-demand” beauty treatments such as blow-dries for your hair, make up and nail services.

Last week, it received a $10 million strategic investment from Debenhams, a UK retailer.

The thing is, Debenhams was eager to buy more shares than Blow was willing to sell — so it offered to buy out the shares of Blow’s early investors.

And that’s why regular investors like you quickly made 3x their money!

The same situation happened with a craft brewery called BrewDog:

Investors like you contributed about $2.6 million to BrewDog’s funding round…

And a short time later, when a firm called TSG Consumer Partners made a strategic investment in BrewDog, it bought out the start-up’s early investors…

And those investors quickly made a 2,765% return! 

Cash-Out Strategy #2: Sell on a Secondary Market

The second cash-out strategy involves a new type of market for private shares.

It’s called a “Secondary Market.”

A secondary market gives investors like you the opportunity to sell your start-up shares now — even if the start-up hasn’t been acquired or gone public yet.

For example, a secondary market in the UK has been operating for some time now. It’s called Seedrs, and investors have been using it with great success. For example:

  • An investor in a software start-up sold his shares on Seedrs and quickly made about 860% on his money.
  • An earlier investor in the same start-up made even more: he banked 1,500%.
  • And an investor in an e-commerce start-up made almost 2,000%.

In the U.S., similar markets operated by Acquire Real Estate and CircleUp have recently opened — but they’re for “accredited investors” only (those who earn at least $200k a year, or have a net worth of at least $1 million).

But last week, a secondary market launched for all investors…

A Secondary Market for All

I’m referring to the new secondary market from StartEngine…

We introduced you to StartEngine very recently, and we promised to give you a heads-up when its secondary market launched…

Well, it just launched.

The kinks are still being worked out, so there isn’t much “action” quite yet...

But after taking a quick look, we saw some shares for sale with a familiar name:

Alkane Trucking Company.

Alkane produces a line of awesome-looking trucks that run on alternative fuels.

We showed you this deal back in April. It was in your weekly “Deals” email on Monday, April 3, 2017:

Picture1

Did you buy shares? At the time, they were selling for $4.26 each.

Today, less than six months later, an investor like you is aiming to sell them for $50 a share — more than 10x what he paid for them!

Want To Sell Your Shares?

Have you bought any start-up shares on StartEngine?

If so, you might already be able to sell them for a profit.

To do so, go to StartEngine’s secondary market here »

Click on the green button at the bottom that says “Suggest a Company.”

To be clear, it’s early days yet, and there’s no guarantee that you’ll have a buyer for your shares.

But we’re very excited that new innovations like this are enabling start-up investors like you to back some of the most promising companies in the world…

And are allowing you to turn your shares into cash when you want to.

Happy Investing

Best Regards,
Matthew Milner

Founder
Crowdability.com

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