IB Net Payout Yields Model

Firsthand Technology Fund: Pre-IPO Cash Hoarder

Small Cap Insight

To investors frustrated with being locked out of the pre-IPO market, business development corporations (BDC) such as Firsthand Technology Value Fund (SVVC) offered potential for participating in the large IPO gains of hot stocks. The reality hasn't reached the hype from back in 2012 when the Facebook (FB) IPO blew up. Now over a year later and with Facebook soaring, one might expect the stock to offer huge upside potential, but one glaring issue exists.

The company is a publicly traded venture capital fund that invests in technology and cleantech companies prior to an IPO. It is run by well-known tech investor Kevin Landis that charges management fees of 2% of gross assets and 20% of capital gains. The company competes for investments with venture capitalists, accredited investors and other public funds such as GSV Capital (GSVC) and Keating Capital (KIPO).

Read the full article at Seeking Alpha.

Disclosure: Long GSVC. Please review the disclaimer page for more details. 


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