The ease at which you can access something, is the ease at which it can rob you, especially as you run for the exit. Glitzy UI masks AI-powered sludge, suffocating independent thought. We’ve arrived at mediocrity.
In another world, higher rewards may be available for those willing to see things as they’re about to be, rather than how they ought to be. Where are all the viable investment opportunities? Well a lot of them may be found in smaller companies. There’s the catch – most everyday investors can’t access earlier stage investments. Today, we’re talking about the democratization of early-stage investing.
Today, let’s explore the democratization of early-stage investing.
For a bit of background before we start, a stock is exchange is like any old market: Buyers and sellers engage in the exchange of assets of value. Currency is commonly used on one side of the trade, while ownership rights over goods or services are transferred in return. In the case of a stock market, buyers and sellers trade units of ownership in companies, granting the right to a share of the company’s profits and capital gains.
Whether tiny, niche or nascent, traditionally, early-stage investment opportunities were only available to accredited or wholesale investors. Now, the barriers are being lowered for everyday investors to access these high-reward opportunities. Just another disclaimer then – With easy access comes the risk you may make an easy exit. This is especially dangerous for those who haven’t yet experienced the real life lessons of risk and return yet. Remember to consider your ability to withstand the ups down’s typical of early stage investing, and ideally get some advice before proceeding for yourself.
But at the heart of this discussion today is the stock exchange, where buyers and sellers trade ownership rights in companies for a share of their returns. Private companies may need to raise capital and often the most practical way to release some equity and benefit from diversification, is to go public.
Colin Magee is the co-founder of Catalist, and he joins us to discuss how their new public stock exchange is making it easier for smaller companies to access public markets. With periodic auctions instead of continuous disclosure, Catalist is redefining the pre-requisites of both the investors, and companies alike. Why the big deal? Well investors interested in a broader range of diversification, may consider earlier stage companies for the higher risk, growth portion of their portfolio.