Boom! Shares of social media company Snap (SNAP) rocketed higher last week — essentially quadrupling in about a year.
Most investors were thrilled… except for one.
You see, when Snap went public in 2017, NBCUniversal bought shares worth about $500 million. But after waiting for its investment to pay off for years, it finally gave up…
It sold all its shares at the end of 2019, barely breaking even. Meanwhile, if it had just held on, those shares would currently be worth about $2 billion. Ouch!
The thing is, similar scenarios play out for investors like you every day. Perhaps you lie awake at night, wondering, “Should I hold? Should I sell? What should I do?”
So, today, I’ll introduce you to an alternative to all this anxiety and handwringing.
It’s my No. 1 trick to stop worrying about the stock market — and start profiting.
Stomach-Churning Market Volatility
The stock market has become highly volatile recently.
Stimulus plans, rising interest rates, risks of inflation, good earnings, bad earnings — all this news results in investors getting whipsawed:
The market’s up 300 points, down 650 points, up 400 points, down 1,000 points.
And meanwhile, even huge companies like NBCUniversal can’t figure out how to get in and out successfully. Timing the market is very, very challenging.
But there’s an alternative to all this.
And to explain what it is, let’s look at a different investor in Snap…
A True Story
A few years ago, SnapChat was just a tiny startup.
It was creating a new type of app where messages and pictures would “disappear” soon after they were delivered.
Some staff members at St. Francis High School in California heard that SnapChat was raising money — and through a parent at school, St. Francis was introduced to SnapChat’s founders.
These staff members soon decided to invest $15,000 of the school’s endowment into the fledgling startup.
Then, when Snap went public, St. Francis’s cashed out…
For an estimated $24 million.
The 3 Main Benefits of Startup Investing
In other words, St. Francis High School was a startup investor in Snap. It invested while the company was still private.
Investing in startups like this can be incredibly exciting. After all, you might be investing in the next Biogen, the next Facebook, the next Airbnb.
But there are other benefits beyond excitement:
Sleep Well at Night
Investing in the stock market can be like riding a terrifying rollercoaster.
You’re up, you’re down, you’re up, you’re down. That’s a recipe for losing sleep, and potentially, losing a lot of money.
Now compare that to startup investing:
After investing in a startup, you simply wait for it to be acquired or go public — then you cash out. It’s a simple, fool-proof, sleep-well-at-night investment.
Ground-Floor Entry Price
Secondly, with startups, you’re getting in at the lowest possible entry price.
There’s no need to worry about overpaying for your shares. You’re getting in at the ground floor, when the company’s stock is at a rock-bottom price.
Massive Upside with Little Upfront Capital
And when a startup is successful, even a tiny upfront investment can turn into a fortune.
As you just saw, St. Francis High School turned a $15,000 investment into $24 million. That’s a gain of 1,600x.
And there are hundreds of similar stories. For example:
- Our friend and colleague Howard Lindzon made 400x his money by investing in Uber back when it was an early-stage private startup. That’s enough to turn every $5,000 he invested into $2 million.
- Facebook’s first private investor made about 2,000x his money. That’s enough to turn every $5,000 into $10 million. Can you imagine?
- And even when you factor in the winners and the losers, over the past 20 years, early-stage startups have returned an average of 55% per year. At 55% per year, in 20 years, you could turn a $500 investment into more than $3.2 million.
Stop Worrying about the Market
It’s one thing to talk about hypothetical investments, or to read about them in a textbook.
But it’s quite another to see real examples like Snap, where early-stage investors made a fortune — despite the ups and downs of the stock market.
This is something you really need to understand. Early-stage private investors, ordinary people just like you, are turning tiny investments into windfalls…
And it’s happening far more than you could imagine.
Our aim at Crowdability is to help you identify these early-stage companies while they’re still young and inexpensive. And to help you build a portfolio of them, so you have the best chance at maximizing your success.
Remember, by investing while a company is still private, you can protect yourself from the ups and downs of the stock market, and you can maximize your profits.
These tiny startups can transform your bank account — and transform your life — in the blink of an eye.