Democratizing Investing Part 1 - Unbundling Private Equity

Moonfare Business Model
Private Equity Investments

Super interesting things are happening for democratizing investing around the globe.  Be it Robinhoods and the likes facilitating TUI (Trading under Influence) for millennial investors to Pipe and the likes facilitating direct retail investment into Revenue generating SaaS companies via Revenue Based Financing models.

With all the buzz being focused around retail (B2C) investor platforms the age old Private Equity Investing has remained archaic and away from the lime light for quite some time.  

(P.S. Private Equity is a super set of Venture Capital which is a super set of Angel Investing - since all 3 deal largely with unlisted private companies, thus the term Private Equity is used in general, PE and VC will be separately analyzed in the sections below).

The reason private equity is so private and secretive in it's dealing is that it's not for your typical retail avg Joe investor who likes to TUI or build a public securities portfolio for 15-20 year horizon.  Plus the costs associated with investing in PE (apart from the capital deployed) is also serious money for the avg retail investor.  With tech businesses becoming mainstream targets of private equity (speaking for VC money here) it's about time that that the change agents i.e. these investors also go tech!  

Connecting the dots above, it is apparent that there was a clear gap for digital first PE / VC.  This gap stands filled with the emergence of digital PE/VCs (more like virtual PE/VC firms) like Moonfare, Angel List and Funders Club etc.  The model is pretty lean with lot of the heavy lifting being done by the investment team of the target funds and the tech infra being put up by these new Age PE/VCs for un-assisted onboarding and follow-on self service by prospective (semi-retail) investors.

This is a series of posts outlining the new asset classes available to the retail investors to diversify into asset classes which erstwhile either did not exist or were out of reach due to minimum ticket size constraints.  Part 1 (this post) of the same will deal with Virtual Private Equity and Venture Capital Funds.

Private Equity

Venture Capital Business Model
Private Equity Investments