If you have the money to invest, I highly recommend looking for the disrupters in the pre-IPO market. Pre-IPOs are pre-initial public offerings, a late-stage for a private company to raise funds in advance of its listing on a public exchange. Think Airbnb (disrupted the hospitality industry), Uber (disrupted the taxi and transportation biz), Facebook… you get the gist. In this episode, I discuss the incredible opportunity in investing in pre-IPOs, and give you some tips and suggestions for where to look for the next big thing.
Also, hit me up on Instagram @indestructiblewealth! Send me a DM with your questions, and I promise you a personal answer back. Let’s grow some wealth.
Listen to the podcast here
How To Move The Needle On Your Wealth With Pre-IPOs
You guys don’t know this but the rules have changed in your favor. What do I mean? The everyday Joe and Susan can now invest in deals before they go public. They are called pre-IPOs which stand for Initial Public Offering. You can get in for $1,000 on these deals. You don’t need a ton of money. Let me explain how this works. This is a real chance for you to move the needle on your net worth in fast way. This is not for somebody that has a few thousand bucks to invest. I wouldn’t do these. This is a great opportunity for you to take a small allocation of your total investable dollars and maybe potentially put it into hyperdrive, setting the stage for you here.
Have you ever had a good surf and turf like the ribeye cooked medium rare to 600 degrees at Ruth’s Chris? That’s good. You get the king crab legs already cut. Not like the snow crab where you got the little ones that you have to dig through for an hour to get a little bit of meat out that you got the melted butter to dip them. “I was going to do it,” that’s what she said in that last part but I stopped. I can’t imagine too many things being better in life. There are a couple of things for sure but that’s right at the top of the list.
The regular Joes and Susans, main street stock investors, typically get the chart and the fatty leftover pieces of the steak, and then they dig through the remnants of the hard-to-reach leftover crab, where you get so full and don’t want to work that much harder to crack that little extra piece of shell to get the rest of the crab out. If you were super hungry, you would probably put the effort in but you don’t care, so you got these leftover remnants.
That’s the table scraps that are fed to us, the regular everyday investors, the people that get in before the company goes public, the venture capitalists get and capture the big part of the pie. Why is that? As soon as the company is listed on the exchange, usually, the price goes up big multiple over what the private investors had bought in for.
Overnight, they capture quite a bit of equity value increase. What happened was, back in 2012, what changed the game was the JOBS Act. It took a few years from there until 2015. This was when the first law of what’s called Regulation A+ went into effect. I’m going to keep this simple. This is essentially what this means. This was the first time that regular investors, not just wealthy hiring accredited investors, were able to invest in the companies that were reserved for wealthy venture capitalists.
What’s an accredited investor? Pretty simple. You got to have over $1 million net worth or you are making $250,000 or more individually, or jointly, you are making over $350,000. The rules of the game have changed in favor of the everyday investor. It is time that we embrace it but most people don’t know about this stuff.
I’m here to disrupt the industry and give you guys the goods. You guys want to pay attention. Think about this. If you have been on the inside and there’s a bunch of pre-IPO opportunities where you would’ve made some serious life-changing gains, you are talking 100,000% or 200,000% increase on some of these companies that instead of on the outside looking in, you would’ve made some serious movement in your net worth. These types of investments, however, take a different type of mental and emotional approach. I’m going to set the stage for you. When you put your money in, it’s not like a normal stock market investment where you see price action where the stock price goes up or down immediately.
You could buy in, and your money is sitting in there. It could take many months or even a couple of years before anything happens. Typically, nothing will happen until the Regulation A+ offering, where they are raising the money that they are going to then use to grow their business until that sells out. Even from there, it could take quite a bit of time before it goes public on an exchange.
I would also recommend that you not place a large bet on one pre-IPO company. You want to approach this like a venture capitalist, what’s called position-sized bets on multiple pre-IPO offerings. This is real easy. Don’t get overwhelmed here. Stay with me. A position-sized bet is where you take the total amount of money that you are willing to invest into this type of asset and spread it evenly across each one.
For example, if you have $10,000 and you have five well-researched choices, then you take $2,000 and put it into each one. Instead of taking $10,000 and going on 1 of the 5, or $6,000 going $1,000 on the other 4, you are going spread $2,000 out overall 5. That’s because you have no idea which one is going to hit. It’s possible that only 1 out of the 5 will be a score.
If one of them goes up 10X before out of 5, go to absolute 0, the one that 10X-ed more than made up for the other 4 that you lost out on. You doubled your money because the one that went up 10X, that’s ten times $2,000, is $20,000, and you had $10,000 in the games. You doubled your money from $10,000 to $20,000. If you had placed, say, $6,000 into one of them and then the rest went to 0, then essentially, all you do is breakeven. You would’ve gotten your money back.
For the one that did go up 10X, you had $1,000 in on it, so it went up to $10,000, and the other 4 went to 0. You completely got your money back, which is totally boring. That’s not the reason why we are investing and taking on risks. What makes a good private placement pre-IPO? I’m going to give you an example of one. This one might have sold out. This is one I put quite a bit into. I did exactly what I was telling you not to do.
I put more than my position-sized bet but I thought this one was incredible and felt strongly about it. I was willing to take that chance but normally, it’s a flat amount of money that I put into these types of deals. Do what I say, don’t do what I do. I can take on a lot more risk than you guys do because I have multiple businesses. I have twelve streams of income. I have quite a bit of cashflow coming in. If this one doesn’t work out, it doesn’t matter. My life isn’t going to change at all. This one is called Robot Cache. What makes a good pre-IPO? Three things. Number one, poised to disrupt a massive industry.What makes a really good pre-IPO? Three things: it's poised to disrupt a massive industry, it's still in its early stages, and it has an IPO on the horizon. Click To Tweet
Think about Uber, which completely disrupted the entire taxi industry. Airbnb disrupted the entire hospitality industry. Facebook completely reinvented social media. That’s one thing, poised to disrupt a massive industry. Number two, it’s still in its early stages. In this case, their sales are only worth $30 million. This means the private company’s value when it’s in its early stages is less than $1 billion. We are in the infancy of this company.
The third thing is that it has an IPO on the horizon. This is the real secret to making life-changing gains. You got to be able to find a way to get into the deal before it goes public and then its valuation explodes. Video gaming is a $162 billion market. It’s set to grow 13% annually over the next six years. It’s bigger than the film industry globally, the music industry, and the publishing industry. It serves over 2.7 billion people worldwide.
I can testify to the fact that my children spend most of their money in this industry. The amount of consoles and new gaming systems, and games, all their disposable income, which is little. It’s not like they are high earners. The money that they do get ahold of, it’s a fight to get them to not spend all their money on video games and items within Fortnite. My lord, did they want to drain their bank accounts by getting suckered into all those little tricks and things that are on that Fortnite game. I ran this investment by them too to see what they thought. That’s how you know when you got an incredible deal. You run it with your children, and if they like it, it’s a no-brainer.
How does this one work? How it’s going to disrupt the video game industry? The normal video game industry, as such, says GameStop has an outdated business model. The fact that people are buying many of their shares and all of that deal is incredible because GameStop won’t even be here five years from now, almost guaranteed. At some point along the line, people are going to lose a lot of money that they put into chasing that stock. That’s a holy different episode. With traditional video games, my kids go to GameStop. They purchase a game. When they are done with it, they could take it back in, the actual disc, and could trade it in. They are going to get pennies on the dollar.
They are not going to get much of their money back. Somebody has got to drive them physically to GameStop to not only purchase the game but then to take it back. It’s a little bit of a pain. It’s like going to Blockbuster. That’s why Blockbuster is now out of business because there’s faster, cheaper, and better, more efficient to be able to digitally download games.
My kids are starting to digitally download games but here’s the deal. When they get bored and done with that game, inevitably, it happens. They can’t do anything to get any of their money back. What Robot Cache is doing, this is genius, is that, say, my kid buys a new game for $60, they are going to be able to sell it back on this platform and get $15 of their money back.
The next person who buys it, it’s essentially new to them because they are not buying a used game per se, it’s a digital copy. When they turn to get bored, then they can then sell it back, and on and on it goes. That digital copy could be sold 10 times or 20 times. This is where it gets good. Think about this. All of that revenue of that game being sold over and over again for the $60 minus the $15 buyback, the trade-in price, all of that money is getting paid back to the developers of the games.
Now they are making more money, the developers, the ones coming up with these games, so they are going to be incentivized to create their games on Robot Cache because they can get paid on it on the sale of the same copy over and over. In the current model, they cannot. They only get paid one time. Now developers are going to be incentivized. The gamers are incentivized because they can download cool new games quickly and efficiently and then sell them back and get some of their money back.
On top of that, the Robot Cache is going to be making a spread on a sale of every game as well. Here’s where it gets even better. They are adding crypto mining onto this platform. Essentially, the gamers are going to be able to leave their computer on. Through this platform, it’s going to be mining for credits towards free games. If they leave their computer on and it is mining cryptocurrency, then essentially, Robot Cache is getting that crypto that’s being mined by these thousands of gamers leaving their computers on that are doing this mining.
The Robot Cache is making even more money, and the gamers are getting their games for free. Everybody is winning on this platform. This is why I took a big chunk because I completely understand it. I see this in play. I can get in now on Robo Cache for $0.30 per share. They are projecting the company from which I get all this research, Palm Beach Venture.
At the top range of what they call their blue sky scenario, we could see games as massive as 266,000% if Robot Cache secures 5% of the global gaming market share. That’s enough to turn a $1,000 stake into a massive $533,000 windfall. That’s on the lower end of their projections. On the top end, it could be as much as $2,666,000 that you take the $1,000 if Robot Cache were to capture 5% of the total global video game sales market.
That’s the blue sky scenario but even on the lower end, it’s looking pretty good. If you would like this idea, again, this one is sold out but you can go check it out for yourself. There’s a waiting list. You visit the website, it’s Invest.RobotCache.com. You can potentially get on the waiting list because they may be opening up another round of funding. I’m giving you guys my favorite pick here completely for free because I want to give incredible value to my platform. I paid thousands of dollars for this research for Palm Beach Venture but I’m giving this away to you for free because I’m awesome and I love you. Here’s the deal, if you want more picks, then here’s what you got to do.
You can earn them. What do I want from you? I want some engagement on my shit. Go to my freaking Instagram page and comment. Not just like, but comment on all my reels that come out for the next 2 to 3 weeks. Come on, give me some love. Comment on them. I need to hack this algorithm. They are fun, too. They are good. Like my shit, comment on it, and then give me some engagement. If you haven’t given me a five-star review yet on Apple Podcasts, then give me a five-star review and write up an actual review that says how incredible this show is and how much value you get from it.
You guys do that. Send me a DM on Instagram. You got to follow me first to do that but send me a DM and then ask me some questions, too. Give some questions and interaction, so I can know what you want to know more about. I want to serve the audience as best I can. Ask some questions about my Story. I got a little button there in my Instagram Story that you can ask and pop a question in right there.
I’m not asking you to set up a LinkedIn account but if you are on LinkedIn, follow me on LinkedIn @IndestructibleWealth, and comment on my post. I’m getting complete total crickets. So far, the only one who liked my post, I put out four posts, is my LinkedIn coach. She’s fucking paid to do it. It’s awful to get complete crickets. I thought my stuff was good, too. I’m like, “This is a great post.” Crickets, nothing.
Nobody can even hit the like button. It’s not that bad. Give me some engagement. Once you’ve given me some engagement and you want them, I will send you over the list. I don’t expect that many people. None of you are probably going to even do this because you probably either don’t care that much or it’s too much effort. If you do want them, I will send them to you for free, just give me something in return. Give me a little love. I hope this helps. Again, I’m not giving you financial advice to get it, Robot Cache. These are pre-IPOs. These are definitely riskier. I can promise you that.
Also, your money could be locked up and not liquid for I don’t know how long. I have no idea. This could give you a chance to get some outside gains if you are interested. Be real responsible. This is a lot more speculative-type investment. It’s not something that you want to bank and put a lot of money into in relation to your total investible dollars but for you and your situation, it could be worth looking into and popping some money in and then forget about it. My mom told me, “Jack, a watched pot never boils. Don’t stare at the water. It takes forever for it to boil.” That’s good advice.
They will never IPO if you keep looking and thinking about it. If you put your money into these, you almost got to forget that you did it because otherwise, you are going to be anxious. It’s not worth being anxious. Any investment, if you are anxious about it, it wasn’t worth doing. It wasn’t worth trading any sort of anxiety for the future result. Give me some love. See you guys soon. Go watch my reels. Have a great day.Any investment you're anxious about is not worth doing. Click To Tweet