A Look Behind The Profit Curtain

By Wayne Mulligan, on Thursday, May 19, 2016

For the last few weeks, we’ve been showing you how early-stage investing can lead to extraordinary financial returns...

Early investors in Uber, for example, made 40,000% in just two years.

But we also explained that you can’t expect every investment to be like Uber…

To protect your downside and set yourself up for big gains, you need to build a portfolio of many, many early-stage investments.

But that still leaves you with an important unanswered question:

How do you choose which companies to add to your portfolio?  

That’s what I’ll reveal today…

Today, I’ll give you a behind-the-scenes look at our investment system…

This is how we—and many of the most successful professional investors—find, fund and profit from the best early-stage companies.

Leading Indicators

When a company is very young, how can you tell if it’ll be a good investment?

I mean, at first blush, there’s not a lot to see: a start-up might have little more than a few employees and an early version of its product.

Well, as we’ve come to discover, there are certain factors you can look for, even when a company is at its earliest stages.

These  “indicators” have been statistically proven to help predict whether a company will ultimately succeed or fail.

Today, we’ll tell you about one of these indicators…

And we’ll show you how it helped a small group of investors earn profits of nearly 400% in just 12 months.

The “VC Indicator”

We call this indicator “The VC Indicator.”

Let me explain:

Venture Capitalists, or “VCs” for short, make their living by investing in private, early-stage companies.

Generally, they invest other people’s money—just like a broker or financial advisor.

But VCs are unique in that they only make significant money if the investments they select do well for their clients. If the VC doesn’t choose well, he doesn’t get paid.

So when we evaluate a new company, we look to see who else is investing…

If a top VC is involved, we consider it a good sign.

To show you what I mean, let me tell you about a deal we saw on a crowdfunding website a short time ago. The deal was for a company called ReWalk Robotics.

ReWalk Robotics 

ReWalk builds bionic devices to help paraplegics walk again.

A couple of years ago, ReWalk was looking for investors to help grow its business.

When we looked at the deal, we saw that someone named Jonathan Medved was investing—and based on the VC Indicator, this was a good sign.

You see, Medved is one of the top VCs in the world.

More than a dozen of the early-stage companies he’s backed have already increased their value to more than $100 million.

The fact that Medved was involved meant that ReWalk had survived extensive due diligence from an experienced VC…

It also meant that, statistically speaking, the company had a higher chance of success. Let me explain...

VCs = Higher Chances for Success

A recent study published by Redpoint Venture Partners found that companies with a professional VC on board—a VC like Medved—are 63% more likely than non-VC backed company to stay in business.

In other words, the company is less likely to fail, and more likely to survive and deliver profits to its investors.

To make a long story short, here’s how things worked out with ReWalk:

Less than a year after raising money from private investors, ReWalk went public on the NASDAQ.

Private investors like Medved who sold their shares at the IPO made nearly 400% on their money. To be exact, they made a 387% return.

A $1,000 investment would have turned into $3,870…

And a $10,000 investment would have turned into nearly $40,000—all in just 12 months.

24 Indicators in Total

To be clear, the VC Indictor is just one of the indicators we look at.

In total, we evaluate 24 of them—and each of them has been statistically proven to help predict if a company is likely to succeed or fail.

The more “winning” indicators a company has, the higher your chances of investment success.

Get Started Now

We teach our students all about these indicators in our premium course, The Early-Stage Playbook.

If you’ve already taken the course, now might be a good time to go through the material again to refresh your memory…

Now that Title III is live, you can put all your knowledge to good use!

Happy investing.

Best Regards,
Wayne Mulligan
Wayne Mulligan


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