Pre-IPO investing can be an exciting way to earn investment income before a company goes public. You are able to buy shares of startup companies at a lower entry price.
Finding these investment opportunities can be easier and more affordable with Linqto. This platform helps accredited investors gain access to private companies with a minimum investment of $10,000.
But is it the best way for you to invest in pre-IPO companies? Our Linqto review will help you decide if the platform is right for you.
Overall Rating
Summary
Accredited investors can invest in late-stage tech startups with a $10,000 minimum investment and no investor fees. The service also offers exclusive research tools and investor conferences.
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Investment options
4
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Minimum investment
4.5
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Research tools
4
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Ease of use
4
Pros
- Pre-IPO investing
- No investor fees
- Multiple investment options
Cons
- Accredited investors only
- Long investment period
- Limited customer service
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Table of Contents
What is Linqto?
Linqto is an investment platform that helps individual investors buy private equity shares in startup companies.
These startups intend to offer publicly-traded shares on the stock market. However, through Linqto, early investors can invest in the companies on their platform via SPV units, before their initial public offering.
This asset class is relatively small. Plus, there can be many pre-IPO scams as the profit potential from “unicorn companies” is appealing. Linqto has integrated the 3rd party, CB Insights, for comprehensive market research.
Linqto screens companies and has had six successful exits since inception of the corp in 2020. That said, you should still perform your own due diligence before investing.
The company is one of the oldest startup investing platforms. They partner with companies they believe have the best success of going public so investors can sell their shares.
Angel investors may appreciate this platform as the minimum investment is only $10,000 per offer. This helps reduce your portfolio risk.
Late-Stage Venture Capital
The service partners with companies that classify as late-stage growth companies. These are organizations with an established customer base. They can be less risky to invest in than small businesses like breweries or brand-new apps.
However, accredited investors use a platform like Linqto to expand their business to file for a public stock offering.
Some of the previous successful exits include:
- Coinbase (cryptocurrency exchange)
- Innovium (cloud storage)
- Robinhood (free stock investing app)
- SoFi (loan refinancing)
Most of the opportunities are for tech startups in a variety of niches. For example, you can get exposure to companies offering software, wearables and digital assets like cryptocurrency and NFTs.
There are approximately 26 investment options with $110 million in assets under management as of April 11, 2022.
How Does Linqto Work?
Linqto is only open to accredited investors as per SEC regulations. To qualify, your liquid net worth must equal $1 million excluding your primary residence. Alternately, your annual income needs to be at least $200,000 ($300,000 for joint investors).
After verifying your accreditation status, you can start investing with $10,000. In some cases, competing pre-IPO investment platforms may require as much as $100,000 per position.
The lower investment minimum and a fee-free experience make it easier to diversify your portfolio and invest more of your spare cash.
New investors have 10 days to transfer their funds to complete the trade and reserve their spot. Repeat investors can expand their position by transferring funds within five days.
Account Types
It’s possible to invest with a taxable or self-directed retirement account. LLCs and trusts are welcome to invest through this platform as well.
You can fund your investment with fiat money, cryptocurrencies and other assets. When using cash, you may make bank or wire transfers.
100% Guarantee to Close
Linqto prepurchases the shares before listing an offer. As a result, your share purchase finalizes immediately, and you don’t have to worry about failed funding rounds.
This method is different from many private investment platforms that require the offer to be fully funded before investing in the company.
Selling Your Investment
When a company goes public, shareholders have two options to sell their shares.
These options include:
- Sell on the public stock exchange
- Reinvest the proceeds in another startup on Linqto
If you decide to keep your shares after the IPO launch, they will convert to publicly-traded stock and transfer to your online brokerage.
It’s possible that your post-IPO investment value can be higher than the entry price for your individual shares.
There is currently no secondary exchange to trade your shares with other investors. However, Linqto has applied for its ATS License, and you may be able to sell shares of select companies back to Linqto in the interim.
How Much Does Linqto Cost?
Linqto is more affordable than many other investment platforms.
It doesn’t charge these investment fees:
- Annual management fee
- Brokerage fee
- Carried interest
To provide some perspective, other platforms may charge an annual fee of up to 3% along with a 5% brokerage fee for new investments.
Your primary financial barrier can be the $10,000 investment minimum, which is low for alternative investments.
Digital Wallet Fees
You may also encounter third-party fees from the Uphold digital wallet. Linqto uses this platform to fund your investments.
The service fee is between 0.2% and 3% depending on your funding source.
Key Features
Here are some of the top benefits of investing through Linqto.
Invest in Startups
Investing in private tech companies can expand your portfolio of alternative investments. You can invest as little as $10,000 in each company.
The search filter lets you see which companies have the highest valuation or search by company niche.
Some of the investable business sectors include:
- 3D printing
- Digital assets
- Fitness wearables
- FoodTech
- HealthTech
- Logistics
- Sustainable materials
You can also read detailed write-ups about the prospective investment. For instance, you can learn more about the company’s officers, finances and relevant documents.
Uphold Wallet
The service partners with Uphold to fund your investments.
This digital wallet lets you transfer these currencies to satisfy the investment minimums:
- Fiat currencies
- Cryptocurrencies
- Precious metals
- U.S. equities
Uphold can be free when you fund your buy order with a bank deposit or debit card. Wire transfers are also available, but your bank may charge an outgoing service fee.
Global Investor Conference
Members have the opportunity to attend an annual global investor conference virtually or in person. You can listen to several sessions about different investment themes to find additional investment ideas.
Market Insights Daily
Members can research private companies from across the world. Many of these are not in the Linqto portfolio. That said, this can help with building your watchlist.
This complimentary tool can be useful in learning more about a company, its financial metrics and competitors.
For example, you can view the Mosaic Score, which uses quantitative analysis to determine a company’s health and future growth potential.
Linqto Bucks
One way to get a head start on your minimum investment is by referring friends with the Linqto Bucks rewards program.
Your referred friends receive $250 in credit. After making their first investment, you receive $750 towards your next investment.
Mobile App
A mobile app is available for Android and iOS devices. Investors can research opportunities, browse the market insights and verify their accreditation status through the app.
Customer Reviews
While there aren’t many reviews about Linqto online, there are ratings on some of the biggest ranking websites.
Here’s a breakdown of how the platform scores on the different ranking sites:
Website | Rating | Number of Reviews |
Google Play | 4.3 out of 5 | 96 |
Apple App Store | 3.8 out of 5 | 26 |
Trustpilot | 3.2 out of 5 | 1 |
These are just a few of the reviews from customers:
“Linqto has allowed me to diversify my assets and invest in a pre-IPO market. This is a rare opportunity, most require $250,000. What a great opportunity for a smaller investor. The SEC sets the rules.” — Doc Tucc
“If you don’t have $1M in assets excluding personal residence or $200k a year two years in the raw your money no good here. Some companies allow for non accredited. Hopefully this firm will make it available for all. As of now useless for most.” – Stravinskiy
“The staff is so personable and helpful. And the fact that they allow for minimum amounts of 10K is much more accessible than any other company out there.” — Daniel M.
“Nice and friendly UI but it’s very demanding to invest. 10K min is a lot. I can easily invest in ICO and get 10x in a good project. At least change this for non U.S. residents as SEC demand those regulations.” – Valantis Charalampous
Alternatives to Linqto
You may consider these platforms to invest in similar companies or pursue a different investment strategy. Non-accredited investors can qualify for these services.
Worthy Bonds
One of the easiest ways to invest in private companies is through Worthy Bonds. The investment minimum is $10, and it earns a 5% annual yield.
There are no early redemption penalties for these small business bonds. This can make Worthy Bonds an excellent short-term investment idea.
Trustpilot rating: 3.5 out of 5
Read our Worthy Bonds review for more.
YieldStreet
YieldStreet lets accredited investors invest in several alternatives assets like real estate, businesses and art. Your minimum investment can be between $5,000 and $15,000.
Non-accredited investors can also get exposure to these assets through the Yieldstreet Prism Fund with a $500 minimum investment.
Trustpilot rating: 2.5 out of 5
Read our YieldStreet review for more.
EquityZen
EquityZen is the most similar competitor to Linqto. You may want to give them a look to compare your investment options for late-stage startups.
The minimum investment starts at $10,000, but investment fees apply.
In addition to investing in private placements for single companies, the service offers managed funds. This investment option can help you get additional diversification with a similar investment amount.
Trustpilot rating: 2.2 out of 5
Mainvest
Mainvest lets accredited and non-accredited investors buy notes in early-stage small businesses. The minimum investment is $100, and you recoup your investment with quarterly repayments.
Each investment offering calculates how much you will earn if your investment is successful and fully repaid. If you prefer investing in bonds with a fixed investment schedule, you may consider this option.
Trustpilot rating: 3.2 out of 5
Read our Mainvest review for more.
FAQ
Here are several questions about using Linqto to invest in private companies. These can help you determine if the platform is a good fit for your investment strategy.
Pre-IPO investing carries more risk than publicly-traded stocks because investment shares are illiquid. In addition, these smaller companies can be riskier than well-established stocks.
Your shares are in a bankruptcy-sheltered account in case Linqto goes out of business. The platform is also registered with the FINRA and SIPC regulatory agencies.
In terms of data security, the platform has a 100 out of 100 SecurityScorecard rating for protecting your sensitive information.
Linqto lets accredited investors invest in late-stage tech companies. These are companies that are positioning to go public through an IPO on the stock market.
They have higher valuations than equity crowdfunding. Plus, they can have better brand recognition among investors and customers.
Some of the best examples of companies in this sector include Airbnb, Coinbase, Robinhood and SoFi.
The minimum investment is $10,000 per offering. New investors have 10 days to fund their buy order, while repeat investors have five days.
You can receive email support or submit a request online. There is also a digital knowledge library for investors.
Summary
Linqto is an attractive platform for pre-IPO investing thanks to its relatively low investment minimum and lack of investment fees.
These private placements can be riskier than stocks and other investment opportunities but less risky than early-stage small businesses. You can make this 1% or 2% of your investment portfolio to maintain healthy diversification.
The upside potential can also be more rewarding than waiting until the IPO launch if this idea fits your investment strategy.
Source: wellkeptwallet.com