Benefits of Private Market Investments vs Public Equities

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Date Published: 
April 26, 2023

The public markets have been taking a massive downwards turn, spooking a lot of people who are both new and experienced in this industry. While chaos erupts, the private market "unicorns" - or companies that are usually defined as $1B+ in value - seem to be much safer bets as they scale up.

Public markets are known to be risky, especially for those who don't have experience within them. Therefore, we should look into what people can do to protect themselves. Furthermore, it's commonly said that investing in private companies is the most effective way to grow your wealth. We can probably agree that it's better to invest in a stable company than one that is on the edge of bankruptcy. But these companies - so-called "unicorns" - are out of reach for most people who have limited capital and limited experience within the market.

In this article, we'll go through all the different ways in which you can profit from investing in private companies. It's advisable to start off by reading some good books on private market investing before you decide to engage yourself in this venture.

Why private companies?

There are two main reasons why people invest in these companies. The first is to build wealth. However, the benefits that you can get by investing in a private company is incomparable to investing in a public one because you're allowed to have more control over your profits and losses. Perhaps this is the most important benefit that you can get from an investment like this. This is because, with public markets, there are many unpredictable risks that could kill your investment, or at least make it very difficult for it to grow. These dangers include things like market crashes, new regulations, and policies, political changes, and other factors such as those that we have mentioned above. On the other hand, if you're investing in a private company, chances are that your investment will be more stable and consistent because you have the freedom to select the companies that you want to invest in. Therefore, for people who want to build a stable and consistent source of income, then investing in private companies may be an option worth exploring.

How can I invest in private firms?

These investments are also known as "alternative investments." There are a few ways in which you can gain access to these firms. One of them is via investment clubs that have been set up just for this purpose. Another way is to open a special account and invest in private companies through these. This is possible because there are special forms of investments called "closed-end funds" and "open-ended funds." Closed-end funds operate under the premise that their prices are stable and will not go up dramatically, while open-ended funds promise that they have big investment potential, but they may go down as well. But since you have full control over your investment, then it'll be easier for you to protect your investment and make it grow if this happens.

What do I need?

In order to invest in private companies, you need to have some capital that you can put into this. Firms like allow you to create an account and go through the accredited investor process so you can select popular private companies from a curated selection, while also gaining AI & ML-driven market intelligence (via PreIPO INTELLI™).

PreIPO works with investors, issuers, financial institutions, corporations, and broker-dealers to enable the purchase of private market-securities through expansive networks across the globe through its suite of AI & ML-based diligence & discovery tools.

To learn more, visit

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