| |  | | Friday, December 26, 2019 | What 2020's Best Deal Opportunities Will Look Like
|  | Dear Startup Investor,
The end of the year - and the decade - is nearly upon us. Around this time each year, I like to take a step back and look at some of the overarching trends that shaped the private equity landscape.
Not only does it paint an interesting picture of modern society... it also typically hints at what the biggest industry movers will look like in the year to come. And as you know, knowing what's about to happen next is the absolute best way to get ahead as an angel investor.
2019 was a banner year for startups in the financial technology space - otherwise known as fintech here in the Valley.
While fintech technically refers to startups that operate in the same space as banks and lenders, I'm talking now about a broader type of fintech, encompassing everything from mortgages to loans to checking accounts and more. Unsurprisingly, two additional industries have blossomed alongside the fintech movement: insurance and real estate.
My theory? This year, Americans saw a sudden and dramatic shift in investor attitudes. The first few months of the year were practically jubilant as VCs and other funds dumped billions of dollars into flowery, growth-obsessed startups, some of them more novelty than substance.
I'm talking about businesses like WeWork, Wag, and SmileDirectClub - all of which either lost billions of dollars while private or tanked soon after their IPOs.
While it wasn't exactly the "popped bubble" effect many analysts predicted, it was certainly a sobering reminder that growth shouldn't always be prioritized above profitability. In the wake of these former unicorns' untimely demises, there's a new trend emerging in Silicon Valley: practicality.
That's right... instead of scooters, e-cigarettes and other things people want, investors are looking for things that people need. That's because, when times are tight, consumers will naturally keep paying for necessities long after they've canceled their BarkBox subscriptions, HelloFresh boxes, and Uber Ride Passes.
Heading into the new year, I'm setting my sights on startups that align with this trend... because I don't think it's going away anytime soon. In fact, a number of factors on the horizon - like a tumultuous election and a volatile stock market - could turn this into more of a tidal wave than a ripple effect.
Right now, I have my eye on one startup that perfectly fits the bill. It solves a big problem in a huge market... has multimillion-dollar contracts lined up with dependable clients... and improves upon a product that nearly every adult in the U.S. uses every single day.
It's not a "sexy" invention... They don't ship it to consumers as part of a monthly subscription... Heck, this product could become the "new normal" and you might never even notice it. But that's the beauty of this company.
This tiny startup's unassuming tech has already scored them contracts with DARPA, the U.S. government, and a handful of other key partners - which could collectively produce more than $1 billion in royalties.
As we head into 2020, I believe it'll be deal opportunities like this that keep my portfolio going strong. And, while some folks think the stock market will take a beating next year, I believe the private equity markets should remain largely unruffled by all the commotion.
I've already put some of my own money into this startup... and I'm thinking about doubling down before things get really crazy. I fully expect this one to become a feeding frenzy once word gets out. After all, they accept both accredited and non-accredited investors... and it only costs a few hundred bucks to take advantage.
The Research Team reports that this company has passed the 1,000X Formula with flying colors, potentially making it a high-value option to add to your portfolio. You can learn more about the team's findings by clicking here.
Until next time,
Neil | | | Trending | | | | | | | | Stay Connected | | | Please do not reply to this email. It was sent from an unmonitored mailbox.
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