Opportunity
Research shows that publicly traded companies are frequently valued higher than comparable private company peers because investors are generally willing to pay a premium for liquidity. Investors willing to accept illiquidity in the form of a private, pre-IPO investment can attempt to capture the valuation differential once a company becomes public.
“Because market players routinely overpay for liquidity, serious investors benefit by avoiding overpriced liquid securities and by embracing less liquid alternatives.”
-David Swensen, Chief Investment Officer,
Yale University