Welcome to Financial Advisor IQ

Millennials Wanting to Invest in Private Equity? There’s an App for That

December 18, 2018

Financial advisors whose clients want to invest in private equity can help them tap into the market through a recently developed app and marketplace, according to news reports.

Austin-based Newchip acts as an aggregated marketplace for several crowdfunding platforms such as Wefunder and SeedInvest, FA magazine writes. For a mere $100 minimum, Newchip’s clients can invest in the same firms funded by venture capitalists, thanks to Reg A+ and Reg CF, two Jobs Act regulations that open up certain types of investing previously limited to accredited investors to a broader audience, according to the publication.

The regulations are expected to raise over $1 billion in 2019, Ryan Ràfols, founder and CEO of Newchip, tells FA magazine.

More than 100,000 investors have joined Newchip since the marketplace went live last year, and the platform has raised “several million dollars” and helped fund over 1,500 small businesses, according to Ràfols, who calls his company "the ‘Shark Tank’ for everyday Americans,” referring to the TV show about competitive entrepreneurship. He also says Newchip is “like Kayak for investing,” referring to the budget air ticket comparison website, FA magazine writes.

Newchip’s individual investors typically invest $400 to $800, he tells the publication.

Ràfols believes Newchip’s demographic is millennials: people 25 to 35 years old who are early technology adopters and who like to invest in things they enjoy, such as consumer apps, “interesting restaurant concepts” and craft breweries, he tells FA magazine.

However, Ràfols cautions against jumping into early-stage companies too soon, the publication writes.

“If someone doesn’t already invest in pubic stocks or have a portfolio,” he tells the publication, “they should probably stay away from these investments.”

By Alex Padalka
  • To read the FA Magazine article cited in this story, click here.