Linqto’s motto is “private investing made simple,” and it aims to help ordinary accredited investors access shares of pre-IPO companies, even if those investors have a relatively limited amount of cash to invest with.
Overall it’s a good platform to at least explore if you’re looking to diversify your investments with private shares, though its selection of shares is relatively small compared to other pre-IPO investing platforms with higher minimum investment requirements.
What is Linqto?
When you hear the term pre-IPO (pre-initial public offering), large billion-dollar corporations and Warren Buffet might come to mind. Pre-IPO refers to the stage in which a private company raises funds before going public, i.e., listing on a public exchange.
Pre-IPO was historically inaccessible to ordinary investors, as most investors don’t have the enormous amounts of cash traditionally required to invest in pre-IPO companies. However, that’s all changing. Today, private investing is more accessible thanks to several new platforms, one of which is Linqto.
Founded in 2010, Linqto is an online investment platform exclusively focused on pre-IPO investing. This platform makes it easier to purchase and sell shares of companies before they become publicly tradable.
How does Linqto work?
Investors interested in accessing private company shares can sign up with Linqto via either its website or mobile app.
It’s important to note that in order to purchase its shares, Linqto requires you to have accredited investor status and requests that you upload supporting documents to verify this status. However, you only have to verify once.
To be considered an accredited investor, you must have one or more of the following:
- An income exceeding $200,000 if you’re single, and $300,000 if you’re married.
- A net worth of over $1 million either individually or with your spouse (not including your primary residence).
- A Series 7, 65, or 82 license in good standing.
To start the process, complete the sign-up form and confirm your accredited investor status by uploading the requested documents. Once you sign up and are verified, you’re ready to make your first investment. The funding process is simple, and Linqto provides you with instructions. New customers have ten business days to fund their orders while returning investors have five business days.
Linqto partners closely with Uphold, a digital platform you can use to buy, hold, send, receive, and exchange a variety of currencies and fund your Linqto orders. Once you link your Uphold wallet to Linqto, you can fund your investments instantly.
How much does Linqto cost?
Linqto brands itself as a ‘zero-fee investment management platform,’ and technically it does not charge management or brokerage fees. It does, however, mark up the price of private shares it buys from companies. In that sense, the fees an investor might pay on other platforms are already baked into the share prices listed on Linqto.
Linqto features
Linqto has some notable elements that distinguish it from other pre-IPO investment platforms.
Low minimum investment
Some pre-IPO investment platforms require a minimum investment of $100,000 or more, which is too high an allocation for many investors, no matter how financially comfortable they may be. Other pre-IPO platforms might allow for a relatively low first purchase amount, but then increase their investment minimums for subsequent purchases. By contrast, Linqto’s minimum order requirement is a consistent $10,000. That low minimum not only makes investing in pre-IPO opportunities more accessible, but also allows you to more easily diversify your portfolio of private investments.
Guaranteed approvals
One reservation you may have with pre-IPO investments is the possibility that an investment will fall through if the company doesn’t approve the share transfer. This isn’t a concern with Linqto because investors are actually making purchases directly from Linqto itself, which already owns the shares you buy on its platform. Therefore, every offer you see on Linqto is 100% guaranteed; there’s no risk of the deal falling through.
That said, investing in private companies is still inherently a risky endeavor, so it’s a good idea to do your due diligence and ensure that you’re comfortable with the level of risk before placing an order.
Referral program
Another perk of Linqto is its referral program. For every accredited investor you refer to the investment platform, Linqto will pay them $250 in Linqto Bucks, which can be used to purchase private shares. If your referral makes their first Linqto investment within 60 days of opening their account, you then get $750 in Linqto Bucks.
Mobile app option
Not all pre-IPO investment platforms allow investors to view and buy shares while on the go. But Linqto members can use the platform on either a desktop computer or mobile device (Android or iPhone). You can even use the mobile app to sign up for Linqto. You’ll find summaries of certain pre-IPO offerings to guide you and help you make an informed decision for your investments, and you can track those investments anytime, anywhere.
Global Investor Conference (GIC)
Linqto hosts a quarterly Global Investor Conference that features a variety of panels and industry experts from around the world. This event allows investors to learn about new developments in private equity and venture investments and gain insights meant to help you with your pre-IPO investments.
The 2022 GIC will be held from May 15-20 in Lisbon. It’s a private event for Linqto customers only and is free to attend.
My experience researching Linqto
Linqto appears to be one of the more user-friendly pre-IPO platforms out there. Checking out the share prices for its listed companies is a refreshingly easy process, and requires potential users to merely register via email. Here’s a screenshot of the platform’s share price display (using Linqto’s own shares as an example):
Some key competitors require users to give out a phone number (hello spam) and/or answer a lengthy questionnaire for share pricing info, which is a bit excessive for what should be easily accessible information.
My biggest complaint about Linqto is that the number of pre-IPO companies it sells is very limited. That said, the shares it does sell are spread out across a surprisingly wide range of emerging verticals, ranging from companies that manufacture autonomous medical supply delivery drones to FoodTech startups specializing in sustainable lab-grown proteins.
Who is Linqto best for?
Newly accredited investors
The low minimum investment might be very attractive to accredited investors with a more limited pool of cash to invest with, or who are looking to diversify their portfolio of private shares across a wide spectrum of companies and industries. A low minimum is also great for those who are relatively new to pre-IPO investing and looking to try it out in a low-stakes framework.
Those who favor a simple approach to investing
Linqto’s terms are very simple and straightforward. The minimum investment level is consistent, and fees are already baked into the share prices they list. So it’s a streamlined approach for those who don’t want to spend extra time calculating the fees they’ll have to pay or keeping track of their minimum purchase tier.
Who shouldn’t use Linqto?
Those looking for variety
Linqto sells shares from a rather limited number of pre-IPO companies. If you’re looking to invest in a more niche industry, it’s quite possible that Linqto isn’t partnered with a company in that field and that you’ll need to look elsewhere to invest.
Investors who aren’t accredited
Most pre-IPO investment platforms, including Linqto, require their users to be accredited investors. If you don’t yet meet the accreditation requirements you can keep investing in publicly tradable companies until your income or net worth grows enough to qualify for platforms like Linqto.
