What's a good way to start investing in private markets?

If you are just beginning your private markets investment journey, I’ve got the perfect answer for you to get started. Private market investments are essentially the investments made into the companies and financial assets that are not listed in the public domain.

The first thing you need to understand when starting out as an investor in the private market is what makes a private financial asset worth investing in? To answer that question and help you get started with your investment journey in the private markets, here are the 3 features you need to look for in a good private market investment option -

1. A strong competitive edge - Any company that wants to be successful in the field of business, needs to have some value that helps the company distinguish itself from its competitors. This value can be found in their product or service, their business model, or even the market penetration and capitalization strategy. As an investor in the private equity market, look out for companies that are easily differentiated from their respective counterparts.

2. Plenty of avenues to grow - An good investable private company is surely not going to limit itself to only one source of income or industry. This is exactly what you need to look for when making an investment in the private market: what and how many strategies has the company formulated to keep itself from reaching its business saturation point. The more, the merrier. Even if a particular private company has not divested itself in different industries, it should at least have more than one method of earning money in that domain.

3. Low or decreasing cost of operation - Businesses often spend more than they earn and thus land up in the tight spot of taking a loan. This either works in their favor or ends up forcing them to declare bankruptcy, whichever of the two happens, as an investor your capital takes a hit. Thus, a good company, that deserves to be in your private markets investment portfolio, has either a lower cost of operation or is working to decrease their operational cost y-o-y, year-on-year.

I hope you find this answer useful and are able to successfully kick-start your investment journey in the private markets. All the Best!

Please read the original post here: What’s a good way to start investing in private markets?