Pre-IPO Profits

The Perfect Environment for Startup Investing

The Perfect Environment for Startup Investing
By Adam Sharp
Date September 28, 2021

While you all know I’ve been a bit frustrated with the high valuations of startups today, there is a lot to be said for investing in this asset class in our current environment.

Many bonds are yielding -5% after inflation is factored in (real yield). Stocks are expensive — and much like bonds, their dividend yields are also negative-yielding right now. The need for alternative investments has never been greater. 

So it’s not surprising that so much money is flowing into venture capital and angel investing. It’s really one of the only attractive growth markets. 

Startup investing has the potential to return 20% or more a year. That’s an incredible value proposition today. It’s highly unlikely that stocks will return that much going forward, and it’s impossible for bonds to.

So while I complain about prices, startups are still a promising asset class to invest in. I will continue to look for great opportunities. 

AngelList continues to be my go-to platform. Deal quality and volume on AngelList has never been higher. Lately, I’ve been pondering launching some syndicate deals of my own. The additional carried interest received could more than make up for elevated valuations. 

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