Late-Stage Investing — A Unique Opportunity for Accredited Investors

Financial advisor Frank Cardia has been in the financial industry since 1996.

As the founder of Blue Sky Financial, Frank Cardia is heavily involved in venture capital funding and has facilitated over $100 million in funding for late stage pre-IPO companies like Pinterest.

Late-stage investing has grown in significance and relevance over the last decade. One of the reasons is that following the dotcom bubble at the turn of the millennium, companies now take longer to list on the public exchanges. Consider these examples — Amazon, founded in 1994, went public in 1997, and Apple, founded in 1976, went public in 1980.

Today, however, it is common to see companies remaining private for up to a decade before going public. Facebook went public after eight years, Pinterest after 10 years, and Dropbox after 11.

The added time has reduced the risk of taking early positions in companies, while allowing investors to make equity investments in companies with proven models just before their IPOs.

Accredited investors now have the opportunity to earn high returns on investments made with short holding times. For example, Zoom closed its last funding round in 2017 at a valuation of $1 billion and went public in 2019, closing its first day of trading with a valuation of $16.2 billion.