A little-known way to invest in the top “off-limits” startups like SpaceX and OpenAI
There are two stock markets in America.
Public markets, where anyone can buy shares in companies like Apple and Tesla.
And private markets, where mostly venture capitalists and accredited investors invest in hot startups like SpaceX and OpenAI.
The number of public companies has been cut in half over the past 25 years. US-listed stocks are becoming an endangered species!
Source: Russell Investments
Meanwhile, private market growth has been off the charts. Companies are choosing to stay private longer. That’s bad for ordinary investors who can’t participate in startup investing. Early rounds are typically reserved for institutional investors and high-net-worth individuals. Folks like you and me can only buy the companies once they IPO and are already worth many billions of dollars.
But there’s a backdoor way to invest in the world’s most valuable private companies — The Destiny Tech100 (DXYZ)
The Destiny Tech100 (DXYZ) is a fund that allows you to own a slice of companies like SpaceX… OpenAI… Fortnite creator Epic Games… and payments giant Stripe.
Here’s a full list of DXYZ holdings in 2024:
Source: RiskHedge, Destiny Tech 100
How much money should you invest in DXYZ?
Put this in the “fun money trade” bucket. A cool opportunity, but don’t throw more than a few hundred bucks into it. Even if you are investing in the hottest startups in the world.
The Destiny Tech100 is a closed-end fund, meaning it can trade above or below its underlying value. And it comes with a 2.5% management fee which eats away into your long-term returns.
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P.S: For more insights and analysis, subscribe to my investing letter The Jolt⚡.
I publish fresh research every M/W/F.
— Stephen McBride, Chief Analyst at RiskHedge
