Prices Down 20% - Time To Buy

By Matthew Milner, on Wednesday, April 27, 2016

Three weeks ago, I wrote to you with a bold prediction:

Based on over three decades of research, I explained why right now is one of the best times to start investing in the private markets.

As it turns out, we’re already seeing evidence that this prediction was accurate...

Now it’s time for you to take advantage of it to earn tremendous gains.

Setting Yourself Up For Profits

On April 6, I told you that two market “signals” had just been triggered »

The two signals are weak growth in GDP, and weak investment performance from the S&P 500.

When those signals occur at the same time, historical market data tell us it’s time to move capital out of the stock market, and into private equity investments like start-ups.

That’s because, in environments like this, it becomes harder to make money in the stock market—

And easier to negotiate investment prices in the private market. That means you can buy into high-growth start-ups at low prices, and set yourself up for profits.

Some folks are already taking advantage of this opportunity…

Meet Dave McClure

Have you heard of Dave McClure?

McClure is a professional venture investor. He invests in early-stage start-ups.

As the founding partner of a $250 million venture capital fund called 500 Startups, he’s invested in more than 1,500 companies over the past five years.

A few of his successes include MakerBot, which was taken over for $400 million; Wildfire, bought for $350 million; and Mint, which was acquired for $170 million.

McClure is a self-described “geek” (he was a math and computer science major in college), and he takes a “geeky” approach to investing:

In brief, his strategy is to make hundreds of investments (hence the name, 500 Startups) that each meet a strict set of quantitative criteria.

One of his most important criterion is price.

McClure knows that, mathematically and practically speaking, by investing at a lower price, he has a better chance of cashing out later at a profit.

(His approach appears to be working: his current portfolio’s annual returns average out to 41.2% per year.)

But McClure’s future returns might be even higher…


Because start-ups across the globe just went “on sale.”

20% Markdowns

As someone who sees thousands of deals every year, McClure is uniquely positioned to understand what’s happening in the private markets.

During an interview last week, a reporter asked McClure how the current economic environment has impacted investment prices—“valuations”—of start-ups.

His response was quick and specific:

“Early stage valuations have come down around 20%.”

In other words, start-ups are currently treating investors to a 20%-off sale.

Perfect Timing

Three weeks ago, I advised you to begin preparing for this opportunity—and today, with prices down even further, I’m banging the drum even more loudly.

That’s because on May 16th, less than three weeks from now, Title III of the JOBS Act goes live.

This law change will finally allow all U.S. citizens—not just professional investors like McClure—to invest in start-ups.

So get ready, because this change is happening at a perfect time for you:

This could be the “golden era” of your investment life.

Best Regards,
Matthew Milner
Matthew Milner


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