- Q. At what stage of development can a company become a member of Dynasty Wealth (DW)?
A. Dynasty Wealth can get involved as early as the incubation stage and remain involved through the commercialization stage. The transformation from the industrial to the digital economy has resulted in the evolution of an ecosystem which includes the human and financial resources to support companies which have exponential appreciation potential. The three developmental stages that a company goes through to become successful are:
a) Stage I: Incubation
Upon a new idea being germinated, the company enters into the incubation stage. During the incubation stage, the product or service is developed. This is the highest risk and highest reward stage in which to invest.
b) Stage II: Acceleration
After the new product or service has been developed, the company graduates to the accelerator stage. During the accelerator stage, the product or service is tested and readied for commercialization. The pricing, marketing and selling strategies are honed. This risk at this stage and the reward are commensurately lower than investing at the incubation stage.
c) Stage III: Commercialization
After the product or service has been tested and the marketing, pricing and selling strategies have been established, the company enters the commercialization stage. The risk and the rewards when investing at this later stage are both lower than the acceleration stage.
2. Q. Can you provide an example of a company reaching the commercialization stage?
A. Sure. UBER is a perfect example. The four minute video entitled “Digital disruptor companies have the potential to get $10 billion valuations quickly” is recommended. Below the video is a table highlighting UBER’s key events including its initial June 2010 commercial launch and all of its key dates from 2009 to 2014.
3. Q. The video about digital disruptors having the potential to go quickly to a $10 billion valuation cites UBER as an example as a company that produced generational wealth. Did any mere mortals have the opportunity to invest into UBER after its commercial launch was successful?
A. Despite UBER’s having a successful launch in San Francisco in June 2010, many venture capital investors passed on UBER’s October 2010 private placement offering. This enabled many individual investors to participate. Digital disruptors having difficulties attracting professional investors is not uncommon. Unlike other non-digital disruptor technology companies, digital disruptors are routinely overlooked by professional investors and venture capitalists. Opportunities become available to unconnected investors at ridiculous valuations because a savvy investor is very skeptical that a digital disruptor can disrupt a large and well-entrenched industry. UBER after perfecting its business model in June of 2010, having to raise capital four months later at a valuation of $5.0 million was at a huge discount to what valuation should have been. Airbnb is even a better example. Since it was founded in 2008, the same year of the crash it was only able to survive because its founders lived off of the company’s cereal boxes for months. See links below for amazing Airbnb stories:
- The link below is about a guy who passed on Airbnb. Read the story about the cereal box and why he has kept it on a desk to be the constant reminder for him to not pass on the next good deal that he sees:
- The link below is to the story about a guy who invested $20,000 only because he believed that Airbnb was a cockroach.
4. Q. Are the investments made into the companies liquid?
A. No. The liquidity for your investments is dependent on the company reaching the commercialization stage and growing its revenue exponentially. Members should always assume that investments made will not be liquid for five years.
5. Q. Assuming that a company graduates to the commercialization stage and is growing exponentially how does the investment in the company become liquid?
A. There are three ways that an investment can become liquid:
a) Company acquired.
b) An initial public offering (IPO).
c) Shares be listed on a Private Company Market Place (PCMP)
6. Q. What is a Private Company Market Place (PCMP)?
A. A PCMP is a private market that enables the shareholders of fast growing private companies to list their shares for sale. The listed shares can only be purchased by the accredited or high net worth investors who are members of the PCMP. The PCMPs emerged in 2008 when Facebook, LinkedIn and several other fast growing digital companies decided to delay their IPOs. Prior to their 2011 and 2012 IPOs the shareholders of LinkedIn sold billions of dollars of their shares on the PCMPs. We recommend that you read The February 2016 article entitled, “Secondary Shops Flooded with Unicorn Sellers”. The article revealed that the holders of unicorn company shares were able to sell $47 billion of their shares in 2015, an increase of more than 80% as compared to 2014.
7. Q. What is a unicorn company?
A. In 2013, a venture capitalist defined a young company that attains a billion dollar valuation as a “unicorn” since they are extremely rare. Achieving unicorn status is a significant achievement. It has the potential to increase the demand and price for the unicorn company’s shares on the PCMPS. There are currently194 unicorn companies in the world. The leading unicorn is UBER, the world’s most valuable transportation company. The definition of a unicorn company according to Investopedia:
A unicorn, in the world of business, is a company, usually a start-up that does not have an established performance record, with a stock market valuation or estimated valuation of more than $1 billion.
8. Q. Does Dynasty Wealth have any companies that are close to becoming recognized as unicorn companies?
A. While all of the companies in Dynasty Wealth’s stable have the potential to one day become unicorns there are two that could be recognized as unicorn companies as soon as by the end of 2017. One of them has been in and the other will soon be entering the commercialization stage. They both have extremely viral digital models which have a global reach. One which is a disruptor to the Social Media industry has been growing exponentially for the past six months. The other which is a disruptor to the $600 billion global TV and Video advertising industry is on the verge of exponential growth.
9. Q. Does Dynasty Wealth have a track record?
A. Dynasty Wealth does not yet have a track record since its less than five years old. However, its founder Michael Markowski who was named by Fortune Magazine as one it 50 Greatest Investors does have a track record for finding early stage companies that have since grown by more than 100 times. The video below is interview of Mr. Markowski about a company that he discovered and underwrote when he was a Wall Street investment banker. The company has since grown from $2.7 million in annual revenue to an annualized revenue run rate of over $800 million based on its most recent quarter.
10. Q. I am interested in becoming an employee or officer or director of a company in Dynasty Wealth’s stable. If that is possible how should I proceed?
A. Dynasty Wealth is happy to introduce potential officers, directors and employees to its member companies. Dynasty Wealth is also interested in adding regional partners, etc. Send an email along with your resume to info@DynastyWealth.com.
11. Q. Isn’t there a conflict of interest since Dynasty Wealth receives fees in cash and stock from all of the companies that it covers?
A. No. It’s quite the contrary for two reasons:
a) Dynasty Wealth has a vested interest to maximize the value of the shares that it and its investor members hold in the companies.
b) Since every company must enter into a three year contract with Dynasty Wealth constant updates are available to all of DW’s investor members.