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Presented at the SEC’s Small Business Capital Formation Advisory Committee meeting held earlier today, Pitchbook shows that “crossover investing” has risen dramatically as these firms seek alpha returns. In 2021 alone, 885 deals garnered the support of crossover investors with most participating in later stage rounds. VC IPO exits have more than doubled in the past ten years and now – crossovers are leading some rounds.
So who loses out when more value is created in private markets than public markets? Smaller retail investors who are frequently blocked from backing many of these firms. While there are some avenues for retail to join in on later-stage private funding, more needs to be done – including an expansion of the definition of an accredited investor and more funds in the sector available to retail investors.
The Pitchbook presentation is embedded below.
pitchbook-sec-presentation-crossing-over-into-venture-092721
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