{"id":14233,"date":"2019-07-23T17:00:05","date_gmt":"2019-07-23T21:00:05","guid":{"rendered":"https:\/\/www.jeffclarktrader.com\/?p=14233"},"modified":"2019-07-23T17:00:05","modified_gmt":"2019-07-23T21:00:05","slug":"the_new_way_to_get_rich_on_ipos","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/the_new_way_to_get_rich_on_ipos\/","title":{"rendered":"The New Way to Get Rich on IPOs"},"content":{"rendered":"<p>For the past week or so, I&rsquo;ve been telling you all about about my friend and colleague Jeff Brown. If you don&rsquo;t know him, Jeff is a technologist and angel investor. He&rsquo;s had a lot of success spotting the kinds of tech companies that are truly revolutionary, with the potential to hand investors exponential returns over time.<\/p>\n<p>But recently, Jeff has discovered something different. It involves <strong>a shorter-term trading strategy<\/strong>&hellip; One that he says can grant folks returns just like the best venture capital funds &ndash; in a fraction of the time.<\/p>\n<p>I&rsquo;ve seen it, and I won&rsquo;t mince words. It&rsquo;s impressive. That&rsquo;s why, today and tomorrow, I&rsquo;ll share a couple essays that show you why Jeff&rsquo;s newest project deserves any trader&rsquo;s close attention&hellip;<\/p>\n<hr>\n<p>The date was May 15, 1997.<\/p>\n<p>A small company founded in Bellevue, Washington was set to go public. With the modest ambition of selling books online, Amazon (AMZN) listed for just $18 a share.<\/p>\n<p>We all know what happened next&hellip;<\/p>\n<p align=\"center\"><img decoding=\"async\" alt=\"\" src=\"https:\/\/jc-stable.s3.amazonaws.com\/ee-assets\/channels\/articles\/mm\/201907\/20190723-MM-01.png\" width=\"700\" style=\"width:100%; max-width:700px; margin: 0 auto;\"\/><\/p>\n<p>On a split-adjusted basis, Amazon rose from $1.54 per share to where it is today &ndash; around $1,904 per share. That&rsquo;s an incredible 1,236 times your money, or a 123,536% return on investment. That turns every $1,000 invested into $1.2 million.<\/p>\n<p>The best part? Anyone that had a brokerage account had an opportunity to capture those returns.<\/p>\n<p>But sadly, the opportunity to invest in the &ldquo;next Amazon&rdquo; has all but disappeared today.<\/p>\n<p>You see, something extraordinary has changed during the last decade. And very few investors know about it&hellip;<\/p>\n<h2 align=\"center\"><strong>Dramatic Shift<\/strong><\/h2>\n<p>The pace of technological innovation and new company creation is at a rate we have never seen before. But the opportunities to invest in the next Amazon or Google have all but disappeared.<\/p>\n<p>What happened?<\/p>\n<p>Back in the late 1990s or early 2000s, if a private technology company had $20&ndash;$50 million in revenues and was generating free cash flow (i.e., its cash balance was growing, not shrinking), it was time to go public.<\/p>\n<p>Companies sold shares via an initial public offering (IPO). This gave them the capital they needed to reach the next stage of growth.<\/p>\n<p>Today, more and more technology companies are using angel investors (funds from private individuals) and venture capital (VC) dollars (funds from private investment groups) to bring their products to market.<\/p>\n<p>These companies can fund research, development, and revenue growth without the scrutiny and expense of being publicly traded companies.<\/p>\n<p>The chart below gives you some idea of this trend.<\/p>\n<p align=\"center\"><img decoding=\"async\" alt=\"\" src=\"https:\/\/jc-stable.s3.amazonaws.com\/ee-assets\/channels\/articles\/mm\/201907\/20190723-MM-02.png\" width=\"700\" style=\"width:100%; max-width:700px; margin: 0 auto;\"\/><\/p>\n<p>2018 was a record year for venture capital activity. $156.5 billion was invested by venture capital firms across 8,661 deals. That&rsquo;s the most VC investment in a given year <em>ever<\/em>. 2018&rsquo;s venture capital investment even eclipsed that of the dot-com years.<\/p>\n<p>And it&rsquo;s not just venture capital funds. A flood of private money has been funneled toward early stage tech companies.<\/p>\n<p>Since 2009:<\/p>\n<ul>\n<li>\n<p>Asset management firms increased their exposure to technology startups by 11 times<\/p>\n<\/li>\n<li>\n<p>Family offices increased their exposure by 14 times<\/p>\n<\/li>\n<li>\n<p>Hedge funds increased their exposure by 16 times<\/p>\n<\/li>\n<li>\n<p>Mutual funds increased their exposure by 38 times<\/p>\n<\/li>\n<\/ul>\n<p>These investment flows into technology companies led to tens of billions of dollars in annual funding that never existed before.<\/p>\n<p>That was great news for tech startups that needed capital to grow and develop their businesses. But there was a downside for the average investor&hellip;<\/p>\n<h2 align=\"center\"><strong>Major Distortion<\/strong><\/h2>\n<p>The private financing of technology companies caused the entire technology IPO market to dry up over the last few years. After all, why would a company go public if it can just raise round after round of private funding?<\/p>\n<p>The below chart shows this trend perfectly.<\/p>\n<p align=\"center\"><img decoding=\"async\" alt=\"\" src=\"https:\/\/jc-stable.s3.amazonaws.com\/ee-assets\/channels\/articles\/mm\/201907\/20190723-MM-03.png\" width=\"700\" style=\"width:100%; max-width:700px; margin: 0 auto;\"\/><\/p>\n<p>The flood or private capital let leading-edge technology firms stay private for much longer than they normally would. They could have &ldquo;easy&rdquo; access to round upon round of new capital to grow their businesses, without ever needing to go public.<\/p>\n<p>But it also meant that regular Main Street investors couldn&rsquo;t profit from these transformational companies. The biggest returns went to connected venture capitalists. Everyday investors were left out in the cold.&nbsp;<\/p>\n<p>But I have good news&hellip;<\/p>\n<h2 align=\"center\"><strong>IPO Boom<\/strong><\/h2>\n<p>After more than two decades of locking regular investors out of the most exciting technology investing opportunities, the trend is finally reversing.<\/p>\n<p>There are hundreds of &ldquo;digital first&rdquo; tech companies ready to IPO in the near future.<\/p>\n<p>These are companies that were born in the ashes of the 2001 dot-com bust and remained private for a long time because of the flood of private capital into private technology companies.<\/p>\n<p>Collectively, the 2019 IPO boom is expected to set the record for total capital raised by U.S. IPOs in a single year&hellip;<\/p>\n<p align=\"center\"><img decoding=\"async\" alt=\"\" src=\"https:\/\/jc-stable.s3.amazonaws.com\/ee-assets\/channels\/articles\/mm\/201907\/20190723-MM-04.png\" width=\"700\" style=\"width:100%; max-width:700px; margin: 0 auto;\"\/><\/p>\n<p>As you can see, the 2019 IPO frenzy is expected to eclipse the dot-com boom of 1999&hellip; when 547 IPOs raised $107.9 billion.<\/p>\n<p>Ultimately, 2019 will be a banner year for tech IPOs. And that will give investors the chance to invest in the most exciting companies on the planet.<\/p>\n<p>Already, companies like Uber, Lyft, Pinterest, and Slack have gone public. For the first time in years, average investors will have the chance to invest in leading-edge technology companies by simply clicking a button in their online brokerage account.<\/p>\n<p>And this trend is only picking up. Take a look at total capital raised from IPOs broken down by month.<\/p>\n<p align=\"center\"><img decoding=\"async\" alt=\"\" src=\"https:\/\/jc-stable.s3.amazonaws.com\/ee-assets\/channels\/articles\/mm\/201907\/20190723-MM-05b.png\" width=\"700\" style=\"width:100%; max-width:700px; margin: 0 auto;\"\/><\/p>\n<p>As you can see, May was a great month for IPOs. In fact, U.S. IPOs raised more money during the month of May than they did from January to April combined.<\/p>\n<p>What does this all mean to you as an investor?<\/p>\n<p>It means that, for the first time in years, everyday investors will be able to buy into the best technology stocks on the market.<\/p>\n<p>You&rsquo;ve likely already heard about some of these blockbuster IPOs like Uber and Lyft.<\/p>\n<p>But make no mistake. This trend is much bigger than just Uber and Lyft.<\/p>\n<p>There is a backlog of technology deals right now waiting to hit the public markets.<\/p>\n<p>In fact, the largest, fastest returns won&rsquo;t be found in these large IPOs&hellip; I&rsquo;ve found something better.<\/p>\n<p>For five years, I&rsquo;ve been quietly developing a system to pinpoint small tech stocks on the verge of explosive moves higher. And I&rsquo;m finally ready to reveal my research.<\/p>\n<p>If you want to make money in weeks, not years, from early-stage tech, this is the best way I know how.<\/p>\n<p>And before you ask, no&hellip; <strong><em>I&rsquo;m not talking about buying pre-IPO shares.<\/em><\/strong> &nbsp;It&rsquo;s something else entirely.<\/p>\n<p>I&rsquo;m hosting a free investing webinar tomorrow night at 8 p.m. ET where I&rsquo;ll explain everything.<\/p>\n<p>Space is limited, but there&rsquo;s still time to save your spot. <a href=\"https:\/\/pages.exct.bonnerandpartners.com\/page.aspx?QS=773ed3059447707dbff3909dd1252b32ad2f93267c966452528d21029c8ec0da&#038;email=%%emailaddr%%&#038;source=190723JMUFreePMEd&#038;type=main\" target=\"_blank\" rel=\"noopener noreferrer\">Sign up right here.<\/a><\/p>\n<p style=\"-ms-text-size-adjust: none; -webkit-text-size-adjust: none; margin-bottom: 20px;\">Regards,<\/p>\n<p style=\"-ms-text-size-adjust: none; -webkit-text-size-adjust: none; margin-bottom: 20px;\">Jeff Brown<br \/>\n  Editor, <em>Exponential Tech Investor<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Here&#8217;s how smart investors bet on new tech IPOs&#8230;<\/p>\n","protected":false},"author":34,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[22],"newsletter-type":[],"ticker":[],"class_list":["post-14233","post","type-post","status-publish","format-standard","hentry","category-market-minute","publication-market-minute","person-jeff-brown"],"acf":[],"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/14233","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/34"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=14233"}],"version-history":[{"count":0,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/14233\/revisions"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=14233"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=14233"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=14233"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=14233"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=14233"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=14233"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=14233"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}