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written by reader First Stage Investor Newsletter

By joyk1, January 24, 2017

Does anyone know anything about this newsletter. It promises to get you in on the ground floor of new startups that are going to do extremely well.

This is a discussion topic or guest posting submitted by a Stock Gumshoe reader. The content has not been edited or reviewed by Stock Gumshoe, and any opinions expressed are those of the author alone.

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Travis Johnson, Stock Gumshoe
Admin

We have not covered it, but there are a couple letters like this that promise to get you in on private investments — unlisted venture companies can now raise money from individuals thanks the the JOBS act of a couple years ago, so it is much easier for unaccredited investors to invest in startups now, but do keep in mind whether or not it is probable that you will achieve fantastic returns… venture capital funds are flush with money and chasing all the best early-stage investments and pouring tons of money into them, so which companies are left that are reduced to trying to appeal to small individual investors? Remember, handling a bunch of small individual investors is a pain in the neck, and it’s much harder to raise a sustainable amount of capital from 1,000 small investors than it is to call up a big venture firm like Kleiner Perkins and ask for $10 million, and the big venture firms will also provide board leadership and access to other key players in the industry (that’s an oversimplification, and the big venture firms also will demand good terms, but you get the idea).

The odds of many those startup companies that are available to individual investors being compelling growth stories (or even surviving to grow into sustainable businesses) are low, in my opinion, I’d stay away from these pre-public investments unless you happen to be an expert in the area and have a compelling reason (trust in management, insight into product, good knowledge of the competitive landscape etc.) to believe that particular company will do very well.

👍 15112
Henrik R.
5 years ago

Hi Travis

Thank you for your always knowledgeable comments! But…:

In the extremely lengthy(!) advertising video (you CAN get a transcript by trying to close the tab) – https://pro.earlyinvesting.com/p/SHRINK4989FSILTNMTBRK/EFSIT814 – Andy Gordon of First Stage Investor argues that with the public law 107-204, also known as the Sarbanes-Oxley Act, from July 2002, it became very cumbersome and expensive for private companies to introduce themselves on the stock market. Therefore most companies wait a lot longer before they IPO on the stock market, if they ever do so. The number of IPOs have been declining a lot. He argues that this means that the big profits are made outside the stock market. Of course he also says that you have to diversify, because in any case these start-ups are somewhat like lottery-tickets.
This all seems quite reasonable to me. Are you saying that he is wrong? Or that all the best start-ups will ‘automatically’ be grabbed by big investors before First Stage Investor can get to them?
Here is what Andy Gordon says about it:

” How can you discover the NEXT profitable opportunities opening up?

Well, that’s where we come in.
Over the past few years, my team and I here at Early Investing have evaluated more than 2,500 opportunities.
After we ran every one of them through our initial screening, only a handful remained.
We then personally reached out to the most promising of these businesses.
We grilled the executives and founders. We checked and double-checked their numbers…
We ran “background checks” to verify that their sales figures added up…
We actually tried out their products and services.
And here’s what I’ve found out about the top companies…
They almost inevitably come from startups that excel in what I call “The Four M’s”… ”
(Management, Market, Metrics, Monetization)

Any comments are welcome, thank you.

Best regards,
Henrik R.

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A M Deist
A M Deist
5 years ago

There are start-up companies that unaccredited investors (those who don’t have at least $1 million and don’t make $200,000 or more in earnings) can get into that have investors like those on Shark Tank. Clearly 90+ percent of all start up companies won’t be successful, so there is a very high risk of losing your money, but many years ago, I invested money in numerous companies that were touted by newsletters and did very well. Many of them went belly up, some did nothing, but others had large gains. If you spread your money among lots of start ups, it doesn’t take more than one or two to double or triple your investment It is what Jim Cramer would call being diversified .

Orion Parrott
5 years ago

Hi, I am able to offer that First Stage Investor covered our company Lendsnap in their May 2017 issue.

Gary Heckler
Gary Heckler
5 years ago

I cancelled this letter last year and they are trying to auto renew it again without my
approval.

nick grabko
nick grabko
4 years ago
Reply to  Gary Heckler

why did u cancl

Gary Heckler
Gary Heckler
5 years ago

I cancelled this letter last year and they are trying to auto renew it again without my
approval.

Henrik R.
5 years ago

Why did you delete this comment?:

Hi Travis

Thank you for your always knowledgeable comments! But…:

In the extremely lengthy(!) advertising video (you CAN get a transcript by trying to close the tab) – https://pro.earlyinvesting.com/p/SHRINK4989FSILTNMTBRK/EFSIT814 – Andy Gordon of First Stage Investor argues that with the public law 107-204, also known as the Sarbanes-Oxley Act, from July 2002, it became very cumbersome and expensive for private companies to introduce themselves on the stock market. Therefore most companies wait a lot longer before they IPO on the stock market, if they ever do so. The number of IPOs have been declining a lot. He argues that this means that the big profits are made outside the stock market. Of course he also says that you have to diversify, because in any case these start-ups are somewhat like lottery-tickets.
This all seems quite reasonable to me. Are you saying that he is wrong? Or that all the best start-ups will ‘automatically’ be grabbed by big investors before First Stage Investor can get to them?
Here is what Andy Gordon says about it:

” How can you discover the NEXT profitable opportunities opening up?

Well, that’s where we come in.
Over the past few years, my team and I here at Early Investing have evaluated more than 2,500 opportunities.
After we ran every one of them through our initial screening, only a handful remained.
We then personally reached out to the most promising of these businesses.
We grilled the executives and founders. We checked and double-checked their numbers…
We ran “background checks” to verify that their sales figures added up…
We actually tried out their products and services.
And here’s what I’ve found out about the top companies…
They almost inevitably come from startups that excel in what I call “The Four M’s”… ”
(Management, Market, Metrics, Monetization)

Any comments are welcome, thank you.

Best regards,
Henrik R.

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6253
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Ritam108
Ritam108
4 years ago