November 17, 2021

How To Invest in Unicorn Startups like SpaceX | Stack Capital ($STCK)

Midas Letter
Midas Letter
How To Invest in Unicorn Startups like SpaceX | Stack Capital ($STCK)
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Have you ever looked at a recent IPO and wished you could’ve invested in the company beforehand? Companies like Facebook, Tesla, and Airbnb were disruptive companies that broke onto the scene that many could’ve predicted to become unicorns out of the gates. But, unfortunately, most non-accredited investors do not have access to invest in these companies. That all changes with the recent IPO Stack Capital Group Inc (TSE:STCK).

Stack Capital is the evolution of private equity. The group is democratizing access to disruptive unicorn startups for investors.

“Businesses continue to stay private longer and longer. They can sit there, they can get the capital in the private market, and there is a lot of return that’s being had in the private market that a lot of individuals don’t have exposure to. So, that’s why we wanted something to democratize where anybody can get access into it, whether you are an individual retail investor, hedge fund, mutual fund, or pension.” – CEO Jeff Parks

Stack Capital is looking to add 15-20 private companies to its portfolio with the goal to achieve an annual target rate of return of 15%+ in book value per share.

Currently, Stack Capital has three companies on the books:

VARO (USD$5 million investment) – The first and only fintech with a US bank charter.
Bolt (USD$6 million investment) – A global leader in the One-Click checkout process for online retailers
Space SPV (USD$5 million investment) –  An indirect investment into Space Exploration Technologies Corp., more commonly known as SpaceX, the world’s largest aerospace manufacturer, space transportation services and communications company.

Stack Capital avoids the seed rounds and early stages of private companies and instead focuses its investments on companies with a proven product-market fit, which are 6-36 months away from going public.

Watch the full CEO interview to understand the business of Stack Capital Group, how its shares will trade relative to its portfolio’s net asset value (NAV), and catalysts for shareholders in the next year.

Transcript

00:00 – Stack Capital Group ($STCK) CEO Jeff Parks
00:35 – Stack Capital overview
00:56 – Investment issuer
01:08 – Current portfolio
02:11 – Indirect investment in SpaceX
02:24 – Investment strategy
02:57 – Risks
03:14 – Share price vs net asset value (NAV)
03:57 – Stack Capital vs funds
04:42 – Reinvestment of capital
05:12 – Access to private unicorns
05:59 – CEO background
07:12 – Geography of investments
07:36 – Rate rise risk
08:52 – Value proposition to investment companies
09:45 – Target rate of return
10:31 – Industry agnostic
11:15 – Canada vs US growth opportunities
11:41 – 2022 growth catalysts
12:05 – Dilution risk

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Disclosure

Midas Letter is provided as a source of information only, and is in no way to be construed as investment advice. James West, the author and publisher of the Midas Letter, is not authorized to provide investor advice, and provides this information only to readers who are interested in knowing what he is investing in and how he reaches such decisions.

Investing in emerging public companies involves a high degree of risk and investors in such companies could lose all their money. Always consult a duly accredited investment professional in your jurisdiction prior to making any investment decision.

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