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A recent Wall Street Journal highlighted that Millennials, in general, don’t trust traditional financial institutions.
The disappointment that individuals within the Millennial and Generation Z demographic have towards traditional financial institutions is partly borne from their lived experience, as over the past two decades, they have lived through the Financial Crisis of 2007-2008, read congressional hearing transcripts about Citadel Securities' involvement in the Robinhood (NASDAQ: HOOD) “Meme Stock” controversy and seen the failure of three banks, namely, Signature Bank, Silicon Valley Bank and First Republic Bank, which stoked fear in equity markets and initiated a run on the bank in certain regions.
Despite the adverse nature of the previously mentioned events, young people remain optimistic about their financial future, with 58% of Gen Z and 49% of Millennials expecting their financial situation to improve this year, according to a Bankrate survey. However, one concern among many is the built-in exclusivity and inaccessibility of many lucrative financial investments, and many young people are eschewing traditional asset classes, opting to use alternative investments to build their wealth.
Against this backdrop, Linqto, a San Jose, California-based firm, wants to reshape the financial landscape by providing individuals access to private investments before they become publicly traded.
Providing Wealth-Generating Opportunities For Young Investors
A recent article by the World Economic Forum found that young people are actively investing. The World Economic Forum’s Global Retail Investor Survey found that 70% of retail investors are under the age of 45. With Millennials and Generation Z having lived through the ‘venture capital era’ and witnessed the entrepreneurial rise of Facebook, now called Meta Platforms (NASDAQ: META), Uber (NYSE: UBER) and Airbnb (NASDAQ: ABNB) – companies that grew from innovative upstarts to industry leaders – many young people have an appreciation and understanding as to how being an early, pre-IPO investor in private companies can lead to generational wealth.
Given the wealth generation that can be attained through private market investments, Linqto's mission is to make investing in private companies as easy and accessible as investing in the public stock market. The platform features high-growth, technology-driven companies that they believe will go public or be acquired within five years.
Accessing Private Markets With Linqto
Linqto's approach to private market investing is distinct from its peers. First, the company primarily invests in mid-to-late-stage private companies within the technology industry. Selected firms must generate a minimum revenue amount with institutional venture capital or private equity investor backing.
Linqto seeks to invest in visionary leaders and management teams with a proven track record of bringing timely products and services to market. The platform's investment thematic focus generally falls within the technology sub-verticals of artificial intelligence, blockchain and digital assets, enterprise software, networking and IoT, hardware and FinTech.
Secondly, Linqto conducts in-depth due diligence on the firms it includes on its platform as it invests alongside its investors. By investing first and ensuring that Linqto has skin in the game, the firm can streamline the investment process, making it as easy as pointing and clicking to participate in the investment opportunities presented on the platform. Leveraging its in-house research expertise and evaluation capabilities, Linqto says it can offer access to top private companies with industry-low minimums and no fees. To learn more about Linqto’s investment offerings, click here.
Finally, Linqto says its fee structure is also a key differentiator, as it is a zero-fee investment management platform. Given that the company purchases shares in large quantities from founders, employees and investors, it receives shares at a negotiated price. Linqto can then make smaller quantities of its shareholdings available to investors at a reasonable markup, thus eliminating the need for further follow-on fees for the investor. Historically, investing in a private company required individuals to invest at least $100,000. Linqto's initial minimum investment amount is $2,500, with subsequent investment amounts being $5,000. In comparison to the pricing structure of other private investment platforms, such as Forge Global Holdings (NYSE: FRGE), EquityZen and HIIVE, Linqto’s fee structure is very advantageous to retail investors desiring access to private investment opportunities. Furthermore, the self-directed investment platforms of Charles Schwab Corp. (NYSE: SCHW) and Robinhood (NASDAQ: HOOD) primarily cater to public equity investments, not private markets.
Linqto: A New Avenue For Wealth Generation
Linqto plans to revolutionize the investment journey in the private market by making it affordable, accessible and easy. With many companies remaining private for longer, Linqto’s platform is a new avenue through which young investors can gain early, pre-IPO access to companies that could potentially be poised to be industry leaders.
As demand for private investments grows, Linqto’s platform can help investors looking to broaden their investment opportunities in a turnkey manner.
To learn more and begin investing with Linqto, click here!
Featured photo by Joshua Mayo on Unsplash.
Benzinga is a leading financial media and data provider, known for delivering accurate, timely, and actionable financial information to empower investors and traders.
This post contains sponsored content. This content is for informational purposes only and is not intended to be investing advice.
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