Ask HN: Pulling all $ out of public equities. Interesting private alternatives?

My portfolio is split 50-50: I have $2M in common Vanguard index funds, and $2M in private illiquid equity from a startup I worked for in the past, via options I exercised.

Every now and then someone contacts me interested in buying some shares of that company, which I promptly sell and immediately buy index funds with the proceeds. I liquidated about $1M of those shares already, let me know if you have $2M to burn sitting in your pockets :-)

I wanted to invest in some private real estate syndications, but then covid came through and I don’t think it’s a good time to buy commercial real estate. Plus, my job keeps me super busy.

To be honest, if index funds end up averaging a return of 3-5% after inflation, it would be more than enough for me, that’s why I keep investing in VTI/VXUS, I have done that for a decade now, non stop.

What options are you finding right now? I find that the opportunities available to little guys like me who might not want to put more than 50-100k per deal are incredibly limited.

I’m having to make my own options, which is the fun part. There is an incredible amount of opportunity that’s too small or not scalable enough for VC and PE. You can effectively do both at small scale and that excites me much more than dropping money into the market and praying. At the scale you and I invest at we can make a meaningful impact on the business with our money and involvement, where that isn’t the case for large companies. I like the prospect of small scale private equity where 1 or more people can vastly change the business, and be long term (not looking to raise a fund else investors come looking for a 2x return every few years). And btw, that is a structural problem with PE, they take huge amounts of money and “guarantee” 2 or 3x in 5 years, which means there are a ton of businesses which will never be attractive to them.

Dm me on Twitter, or email me if want to talk further offline.

With a few hundred thousand to invest I'd probably do a 3-way split between:

https://www.thesyndicate.com/ - back Jason's next 50 deals at 2K each

Put 25K each into the next 4 YCombinator deals at https://fundersclub.com/

Put 50K in the next 2 quarters at AngelList Access Funds https://angel.co/v/access-fund

If you do any of this give me a follow at @baccredited and let me know how it goes. I just followed you as well.

To clarify on the FundersClub recommendation: don't do individual YC company deals, do the rollup funds like this:

Accelerate FC XIX: Y Combinator W18 Fund targeting investments in ~10-15 top startups in the Y Combinator Winter 2018 Batch.

'I’m pulling all of my money out of public equities for the next few years (except my tax advantaged accounts).'

To avoid paying taxes on realized capital gains, you should be selling stocks in your tax-advantaged accounts, not your taxable ones.

Thanks for the advice. You may be misunderstanding my position as it’s more tax efficient for me to do as I mentioned above.

Why do you think that the public markets are a bad investment right now? The public markets are a stock pickers market right now, so something like TSLA is going to outperform a lot of different investment options over the next 5-years.

I can’t tell you if they are or aren’t a bad investment. I am just confident in the level of returns I could get in private investments, and it seems to be better than what I can do in public.

Invest in TSLA as much as you like. I’m going to be investing in things with a lot less 20 somethings invested in it.

Thanks. I was really curious as to people with larger capital available and how they are rotating their money. In the last 3-months, I have had more private investors reach out to me with respect to allocating their capital and increasing returns while bypassing the traditional capital markets.