Start-up companies not on public exchanges can now be purchased by, anyone due to new legislation opening that investment vehicle to anyone rather than only high income investors.
Start-ups have no exchanges for trade, and once invested there is no way to reclaim cash invested. Your investment could remain at a stand still for several years before there is a return, if there is any return at all.
Start-ups are another risky segment to an entire portfolio. Those who have been successful will relate to a larger portfolio as a key to their success. In other words, a minimal investment in several companies is better than a larger investment in a single start-up.
Statistics show a great many new companies are never taken over by, a larger company or, become large enough to be listed as a public company. The two most usual ways of making a great profit for initial investors.
The accumulation of a 100 company portfolio over time is recommended. Successful investors are hopeful 1 or 2 of their investments paying off at 1000% or more. Perhaps another 3 of the original 100 companies pay off at a more modest percentage. Perhaps 95 companies out of the 100 company portfolio never see a profit.
In the end; Not only do you want to see a decent profit but, all of the profit may only be driven by 5% of the portfolio.
This is the segment Facebook came from with the original investors profiting millions. Obviously a major success.
Back to reality, only 1-2% of start-ups have that potential with others profiting to a lesser degree with the biggest percentage of a portfolio being a loss.
There are many on-line sites specializing, and featuring start-up investments including:
Be aware that while recent legislation has allowed for all income levels to participate, some of the sites featuring start-up investments have maintained investor eligibility to only accredited investors at the higher income levels as per previous governing standards.
Your maximum investment/year in this classification is directly governed by, net worth and/or, income.
Start-ups are high risk but, can be very rewarding as well.
Start-up investors must be patient as profits are seen, sometimes in only a few months but, more often in several years when the company is taken over by a larger company or, debuts in the public markets as an IPO.
Comprehensive free information, and premium subscription educational materials can be found on:
First Mining Finance Corporation is the 3rd micro-cap in this portfolio. This minor position (There’s definitely a pun here, and to think I didn’t notice until much later) was acquired not because of this particular stock but, First Mining’s founding Chairman, Mr. Keith Neumeyer who has a successful executive career in precious metal companies. Mr. Neumeyer’s resume can be found on First Mining’s website available by, a left click on the company ticker FFMGF above.
Manzo Pharmeceuticals had some promising early stage testing results for their lactose intolerance remedy.
I bought Manzo several years ago with less knowledge than I have now. At that time, Manzo looked promising.
It is important to note that Manzo is a good case for a company with a single focus with little to promote the business. It begins to lose value, few shares traded, will eventually have no value, and eventually be de-listed from the public market. More information on MANZO is available by clicking on MNZO above.
First Mining Finance Corporation, Coates International & Manzo are extremely high risk!
what I’m about to write about Pennies & Micro-Caps kind of undermines my choice to include several in my own portfolio.
These are the highest risk stocks, usually traded on the OTC Market.
First Mining Finance, Coates & Manzo from my current portfolio are extremely high risk, and fall in to the micro-cap category.
COTE – Coates International was initially bought strictly on the story, and files timely SEC documentation.
MNZO – Manzo is a left over from long ago.
FFMGF –The First Mining position is explained above.
Micro-caps , and penny stocks are vulnerable for many reasons.
They just may not have the capital to sustain, and they quietly fade away. Some are not as quiet and try to re-finance but, the debt is so great they cannot maintain expenses to continue running the business.
Some may be listed, and legitimate but not much further along than a start-up. Start-ups and Micro-Caps may or, may not pay off but, patience is a major virtue as these may be in their infancy without profit for several years.
Some are created as Pump & Dump ventures. This is where a stock is promoted viaa push through an advertising campaign.
The campaigns go quick so those original investors can sell their stock just as those investing during the ad campaign bring it to an artificial high price/share. They’re out, you’re in, and guess where the stock is going from there with shares being discounted in p/sh because there is no more interest in buying, and everyone still in is looking for a way out?
If a consistent, orderly flow of documents doesn’t exist with the SEC, it is probably best left alone even though the requirement to file quarterly does not apply to many of these stocks.
If you are romanticized by the story they have to tell, take the time to investigate the filed SEC documents. You will have a much better idea if the company can sustain itself.
Many of the stocks selling for pennies or less per share usually remain that way. While there is some legitimacy to a very few, most others are not worth your time, and money..
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