I wouldn’t say that’s a good idea if you’re a newbie, just stick to Index Funds and go into individual stocks as you learn (and ofc earn) more.
I’m also assuming that you’re trying to invest via new age platforms that came into existence in the past few years, I personally am not a big fan.
But if it’s a solid company, and you have some money to play around with then put in a small sum but you’ll only get an exit if and when that company gets listed.
There’s a lot more variables and ambiguities related to unlisted companies, you may not be able to do all the channel checks and research.
For example, a lot of the startups are registered in the US or Singapore and will have entities in India for payroll and other purposes, it’s not that simple to invest in US private companies.
There’s a thing that the Chinese do (heard this in one of Aswath Damodaran’s videos), when a company wants to list in Nasdaq/NYSE, they make a shell company in the Caribbean and list that entity. So if you’re buying from US exchanges instead of Hong Kong exchange, you’re getting shares in the shell company, which will prolly be in a legal agreement with the parent company to transfer the proceeds from the issue. But incase of liquidation or something bad happening you won’t have any rights over the parent company since you’re holding stocks in a shell company.
Agree to everything you have written here. And the points discussed in your last paragraph is also something to consider as a risk before going ahead. My root for this question comes from this company UnlistedKart and their current portfolio, haven't throughly checked all the listings.
Those of you here who have invested in them - what platforms have you used?
