If you want a piece of Facebook, Twitter or any number of other pre-IPO companies, you need to come ready to play (and pay). To deal directly with these businesses, you need to wield some serious venture capital money. To pick them up in trading venues such as SecondMarket and SharesPost, you need to be an accredited investor (translation: better than comfortably middle class). Well, there’s another way you can get a piece of these companies: GSV Capital.
Here’s the deal: GSV Capital is a publicly traded company that has stakes in several pre-IPO companies, including Facebook and Twitter (in fact, according to the San Francisco Business Times, it just upped its positions in both companies). GSV buys into these companies with the capital it can bring to bear, and you buy GSV through your broker.
So far, 14.3 percent of GSV’s holdings are in Facebook (350,000 shares), with 735,600 shares of Twitter (16.6 percent of the fund’s value). Overall, GSV has invested $62 million in 18 companies (all backed by venture capital). Other investments include ZocDoc, Grockit and The Echo System – not to mention Gilt Groupe and Zynga.
Since the end of September, GSV has put around $21 million in play, definitely an up-tick in investment activity.
So, if you have the appetite for some hefty risk, there’s now a way to satisfy it. But, be smart. Do your homework. This is a high-risk world.