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Our "Venture Fund" Makes Its Fourth Investment

It's one of the coolest investment recommendations we've ever given you.

And the timing couldn't have been better.

I'm talking about the SharesPost 100 Fund (PRIVX), an investment pool focused on 100 of the very best late-stage startups – companies capitalizing on such powerful tech trends as wearable technology, the mobile wave, social networking, cybersecurity and e-commerce.

Radical Technology Profits Editor Michael Robinson told us about this newly launched fund back on April 29. It's a unique profit play – a rare chance for Main Street investors to invest in companies before they actually go public.

Privately held startup investing is a venue that's usually reserved for high-net-worth "accredited investors" – or for institution-backed private-equity funds. But fund creator Sven Weber – a veteran of Silicon Valley finance – wanted to open up such opportunities to individual investors, too.

When these companies eventually go public – or are snapped up by Silicon Valley heavyweights – the fund will cash out … and the shareholders will reap the windfall.

Because it was a new fund, the SharesPost 100 had yet to make any investments. But Weber has moved quickly, Michael told me yesterday.

"Bill, when we first told your people about this unique play on late-stage startups, Weber had its first investment," he said. "But, as we expected, that's quickly changed. Weber has been steadily investing fund assets. And the number of startups in the fund has risen to four. So it's looking more and more like our investment in the SharesPost 100 Fund came at just the right moment."

The latest addition is Jawbone, a maker of high-end wearable tech and audio devices. Its UP24 Bluetooth-fueled bracelet helps people monitor things like sleep, physical activity, and caffeine intake.

"Jawbone is perhaps best known for its sleek headsets, which use noise-eliminating technology," Michael said. "One noteworthy model is the military-grade NoiseAssassin, which effectively drowns out wind and other background sounds while users listen to music or make phone calls."

The other three firms PRIVX holds are:

  1. INRIX Inc., a leading provider of behavioral traffic data and analytics using a network of 100 million vehicles.
  2. Jumio Inc., which provides an innovative approach to online ID verification and user form completion.
  3. Hightail Inc., a Web-based file sharing and storage outfit that offers a useful alternative to sending large files through e-mail.

Remember, SharesPost doesn't trade publicly. Our gains come through improvements to the fund's net-asset value (NAV). We are up more than 4% to date with an NAV of $21.27.

"This is the kind of investment that should only be tackled by folks who are willing to take the long view," Michael said. "For instance, shares can only be redeemed once per quarter, and redemptions are limited to 5% of the NAV. Though it's unlikely, some investors could get locked in for several quarters in the case of a long-term correction. But as I see it, you really can't function as a de facto venture capitalist unless you're committed for several years. And having knocked around Silicon Valley for more than three decades myself, I know from experience that it can often take much longer than the VCs originally thought for a company to go public."

Let's be clear here: This is definitely a high-risk investment. And that means you'll want to do your own due diligence. We highly recommend that you go to the fund's Website, where you will find background information, a fact sheet and a prospectus. You also can phone the fund at 1.800.834.8707

And you should also take into account PRIVX's sales fees. They are:

  • 0% for investments of $1 million and above.
  • 2.5% for investments of $250,000 to $500,000.
  • And 5.75% for purchases under $50,000.

There's also an annual management fee of 1.9%, a figure that's actually on the low end of what many mutual funds charge.

And remember, this is truly a unique ground-floor opportunity. For anyone who wants to profit from some of the most exciting late-stage startups in the U.S. beforethey go public, the SharesPost 100 offers a rare – and interesting – way to do so.

[Editor's Note: Buy the SharesPost 100 Fund (PRIVX) at market with no stop-loss. Plan on holding your stake for at least two years.]

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