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Coinbase Global Inc. (NASDAQ: COIN) made history last month with the biggest-ever direct listing; its debut market cap was $63.5 billion, and after some big swings, it closed its first day at nearly $86 billion.
For all of that, retail investors who managed to grab shares at the $381 "opening price" and hung in there until 4 p.m. ended up losing around 18% of their stake when shares closed at $310.
Now, this didn't necessarily make it onto CNBC, but there was an entire class of savvy investors who not only didn't lose 18%, but in fact made an absolute killing that day...
Whether they made millions of times their initial investment or "merely" tens of thousands of times their buy-in, these folks were perfectly positioned.
Let me show you how those extreme profits were locked in, because this was not some one-off lucky break or complicated trading strategy. These people, many of whom are now ultra-wealthy, simply made a smart choice at the right time.
With the deal I'm going to fill you in on in a second, you could, too.
How Early Coinbase Investors Did So Well
When COIN shares hit the exchange, their market cap was bigger than FedEx Corp. (NYSE: FDX), Twitter Inc. (NYSE: TWTR), even General Motors Co. (NYSE: GM). No real mystery there; it has 56 million registered users who trade $335 billion in volume on the exchange every quarter.
Co-founder Brian Armstrong is now one of the world's richest people; his stake was worth a reported $16 billion the day of the direct listing.
But of course, it didn't start out like that.
Nine years ago, Coinbase was a tiny San Francisco--based startup company led by co-founders Brian Armstrong and Fred Ehrsam. At that time, one Bitcoin was worth just $6.
TODAY'S BEST CRYPTO BUYS
Three tiny digital coins are gearing up for a rally. One trading for around $12 could deliver a 638% profit by the end of 2021.
TODAY'S BEST CRYPTO BUYS
Three tiny digital coins are gearing up for a rally. One trading for around $12 could deliver a 638% profit by the end of 2021.
A little over a year later, Coinbase was still worth just a fraction of what it is right now. It was a fresh-faced graduate from Y Combinator, a startup accelerator that's worked with ventures that have gone onto become modern institutions, like Stripe, Dropbox Inc. (NASDAQ: DBX), and Reddit.
In a May 2013 funding round, Coinbase raised $5 million, priced at $0.20 per share, at valuation of just $20 million. One investor in this round was Union Square Ventures' Fred Wilson. Another angel investor, Garry Tan, who runs the venture capital (VC) firm Initialized Capital, invested $300,000 into Coinbase at just $0.15 per share.
Following Coinbase's listing, Tan's initial stake is worth a whopping $2.4 billion; Fred Wilson's shares are now reportedly worth $4.6 billion.
Fred and Garry aren't the only ones, though they were very early. Even four years later, in 2017, there was extreme profit potential on the table. That's when Coinbase's Series D round valued the company at around $1.5 billion.
Those 2017 angel investors had a shot at returns of 6,567% when Coinbase went public (based on its predicted valuation of $100 billion).
And that's the beautiful part...
This Profit Potential Is Now Available to Everyone
Whether you call them angel investors, or pre-IPO investors, or startup investors - people become wealthier than they ever thought possible, simply by backing little-known startups right when they're founded, and long before they IPO.
If these investors play their cards right, these startups could explode in value and become worth billions of dollars... potentially kicking back a fortune.
But until very recently, these types of opportunities weren't accessible to everyday investors. It wasn't until the 2012 Jumpstart Our Business Startups (JOBS) Act was signed into law that the doors to angel investing blew wide open. It wasn't until 2016 that anyone could invest in startups, regardless of income or net worth.
And this year, the U.S. Securities and Exchange Commission (SEC) enacted a new series of amendments that have made it even easier for you to invest and have opened up an entirely new (and better) class of startups for you to check out.
There's never been a better time to dive into the pre-IPO world. Somewhere out there, right now, a budding entrepreneur is dreaming up the next Coinbase - that's practically a given.
Only now, it's no longer just the top venture capitalists and institutional angel investors who get to benefit from these types of opportunities. Today, you can have your shot at the kinds of astronomical returns possible when these companies go public...
... and you no longer need to write $300,000 checks to get started.
My Startup Investor team and I have put together a free report - "How Investing in Private Startups Could 1,000X Your Money." The report has a specific deal recommendation on a startup with an impressive intellectual property portfolio that enjoyed eye-watering gross profit margins of 84% in 2020. You'll get the name of the company, plus everything we think you'll need to identify other private startups that could potentially "1,000X" your money in a few years if they go public.
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If you're already a free Startup Investor subscriber, you can access the report right here.
