Star Tech offers UK investors share in Silicon Valley profits
Sunday, 7th May 2017
By James Titcomb - Sunday Telegraph
AN INVESTMENT firm plans to give Britons the chance to back Silicon Valley’s most high-profile companies before they go public.
Star Tech, founded by a group of investors, is raising $5m (£3.9m) to invest in the likes of Uber and AirBnB and it claims to be the first company of its kind in Britain to “democratise” investing in private technology firms, a field that is typically restricted to private equity and venture capitalists.
Tech companies have boomed in recent years and fetched enormous valuations when sold or listed. As start-ups waited longer to go public, a vibrant secondary market exists, allowing existing investors and staff to sell shares, but US law restricts who can buy them.
Star Tech has invested $1m of its founder’s money in companies including Spotify, Pinterest and Dropbox, and says it plans to list as a fund in Guernsey or float in London.
It is targeting wealthy investors and small institutions to raise funds and says while investors must be accredited under US securities law at first, this will lapse once it expands.
Star Tech is being led by Ian Wallis, a former tech investor and corporate finance executive, along with stockbroking veteran Malcolm Burne.
“The secondary market is a dynamic sector [in the US] and we’re scaling it to a UK and European audience that has been locked out”. Mr Wallis said. The company will invest in large, proven private tech companies where there was “less risk of failure”, he said.
Star Tech raising USD50m to invest in pre-IPO US tech titans such as Spotify and Uber
Tuesday, 9th May 2017
Star Tech NG, the UK’s first portfolio company focussed on pre-IPO US tech giants, will shortly commence a second round of funding to raise in excess of USD50 million through a listed Guernsey fund.
Accredited investors are still able to participate in its first funding round up to a total of USD5 million.
The new funds will be invested in an expanded portfolio of pre-IPO disruptive technology companies and next generation scale-up stage businesses.
Star Tech NG is the UK’s first investment vehicle to focus directly on privately held US technology companies and has already invested USD1 million in a selection of companies including household names such as Spotify, Pinterest, Dropbox and Uber.
Pooling investors’ monies provides Star Tech NG increased purchasing power and allows it to spread investments across a sector diverse and company diverse portfolio, mitigating the ‘stock picking’ risk individual investors would face.
It will provide a wider set of investors with the opportunity to benefit from significant potential returns which until now have only been mainly available to US venture capital firms and their large institutional investors. Private technology companies collectively offer a highly robust asset class, which has provided total returns of more than 200 per cent over the past three years and over 500 per cent over five years.
Ian Wallis, director of Star Tech NG, says: “We are extremely excited by the wide range of pre-IPO and growth-stage investment opportunities we have available and the significant potential returns they could provide our investors. This focus sets us apart from the rest of the UK and European market, allowing investors to dine at the same table as US venture capitalists and their large institutional investors.
“Publicly traded shares in the ‘FANGS’ such as Facebook, Apple, NetFlix, Google plus Amazon and eBay have delivered exceptional increases in value in recent years rewarding early investors handsomely. We are delighted that the next generation of Silicon Valley titans are available to UK investors via the access that we have secured and that secondary liquidity in Star Tech NG‘s shares will be available through the JP Jenkins order matching platform until the listed fund structure is implemented.”