For most investors, investable assets include public equities, bonds, real estate, and precious metals like gold. Yet, private equity investments have largely been inaccessible to retail investors due to high capital requirements and limited access. Linqto aims to alter this dynamic by making investing in private companies as straightforward as investing in public markets. This move broadens investment opportunities, enabling retail investors to partake in the potentially exponential growth of pre-IPO firms, offering returns that often surpass those available in public markets.
With companies choosing to stay private for longer periods, the chance for retail investors to invest in firms that are transforming industries and societal engagement is diminishing. These companies often prefer to tap into the abundant capital from angel investors, venture capital firms, and private equity institutions, delaying their entry into public markets. As a result, the economic benefits of these high-growth companies have been limited to a select few. Linqto's investment platform aims to change this by providing retail investors access to high-growth, technology-driven companies that it believes will go public or be acquired within five years.
Linqto conducts extensive due diligence on the companies featured on its platform and invests alongside its investors. This ensures that Linqto has a vested interest, streamlining the investment process to be as simple as pointing and clicking. The platform focuses on mid-to-late-stage private companies within the technology sector, requiring these firms to generate a minimum revenue and have backing from institutional venture capital or private equity investors.
A key differentiator for Linqto is its zero-fee investment management model. By purchasing shares in large quantities from founders, employees, and investors at negotiated prices, Linqto can offer smaller quantities of its shareholdings to investors at a reasonable markup. This eliminates the need for additional fees, making it more attractive for retail investors.
In contrast to other self-directed investment platforms, Linqto is dedicated solely to private, pre-IPO investing. When a company on its platform goes public, the now-public shares are transferred to the investor's brokerage account. For instance, Charles Schwab Corp. recently announced a self-directed alternative investments platform for qualified investors with assets exceeding $5 million, providing access to private equity, venture capital, private credit, and long-short exchange funds. Linqto, however, requires an initial minimum investment of just $2,500, with subsequent investments starting at $5,000, and focuses on full equity ownership in companies, not private equity funds.
The difference becomes even more evident when compared to Robinhood, the commission-free stock trading app. While Robinhood allows for 'pre-IPO orders,' it doesn't equate to actual pre-IPO investing, as orders are only executed once the stock starts trading publicly. Historically, private company investments required a minimum of $100,000. Although firms like Forge Global Holdings, EquityZen, and HIIVE offer pre-IPO investing, Linqto's fee structure is more advantageous for retail investors seeking access to private investment opportunities.
For retail investors who have been unable to diversify their portfolios with non-public investments due to high minimum investments and restrictive fee structures, Linqto is revolutionizing the investment journey in the private market by making it affordable, accessible, and easy. As companies achieve significant revenue growth while remaining private, their investors benefit from potentially phenomenal growth, yielding returns far beyond those typically attainable in public markets. Linqto aims to extend this opportunity to retail investors, broadening their investment options and providing access to considerable wealth generation.
