That makes perfect sense, but it isn't owning equity in the companies that is valuable, rather it is the knowledge of both the current value and change in value of a material number of startups in a particular space.
Today there are a number of research companies that use this exact same information, as reported by public companies as part of those company's obligations to the SEC, to evaluate investment risk and opportunity. Their services go from 'free' (as in Charles Schwab will send you a copy of their research department's report on a company or a segment if you're an account holder) to 'extortionate' which some of the larger trading houses keep in their back pockets to help them pick winners and losers.
As a collection point for this information about privately held companies, it puts you in a nearly unassailable position to do research on which of these companies are likely to be successful or not (your own sort of buy/hold/sell ratings) This isn't even possible today because, as the article mentions. everyone goes to different places to get their 409A valuations. So no single entity has enough of the puzzle to assemble a recognizable picture, yet by offering this valuation service, and attracting a very large number of customers, you create the opportunity to be that single source of information.
I would venture a guess that there are venture capitalists that would pay handsomely for a 'peek' at the state of the industry 'yet to come' as it were. That would not involve you (Preferred Return) owning any equity in any company, all you'd need to do it offer up research reports at $500,000 a copy describing the state of the industry :-)
I am in awe of how amazingly clever this whole scheme is!
Because we want to continue to run a respectable business, and staying in business depends on our clients trusting us, we have no incentive to pursue a data-based revenue model. We are a service provider, like an accountancy or a law firm, not a software or data company.
To do what you propose would involve trading our large, primary revenue stream for an untested one-shot reporting product that would be extremely unpopular with everybody and put us out of business overnight. It makes little sense to me. You draw analogies to public markets, but there's a reason private companies are called private companies.
In addition to our standard engagement terms that forbid such use of client data, we are happy to sign customer NDAs and regularly do so. We have never earned a cent from client data and have no intention of doing anything of the sort.
Happy to discuss over the phone if you have any further suggestions on this front.
Today there are a number of research companies that use this exact same information, as reported by public companies as part of those company's obligations to the SEC, to evaluate investment risk and opportunity. Their services go from 'free' (as in Charles Schwab will send you a copy of their research department's report on a company or a segment if you're an account holder) to 'extortionate' which some of the larger trading houses keep in their back pockets to help them pick winners and losers.
As a collection point for this information about privately held companies, it puts you in a nearly unassailable position to do research on which of these companies are likely to be successful or not (your own sort of buy/hold/sell ratings) This isn't even possible today because, as the article mentions. everyone goes to different places to get their 409A valuations. So no single entity has enough of the puzzle to assemble a recognizable picture, yet by offering this valuation service, and attracting a very large number of customers, you create the opportunity to be that single source of information.
I would venture a guess that there are venture capitalists that would pay handsomely for a 'peek' at the state of the industry 'yet to come' as it were. That would not involve you (Preferred Return) owning any equity in any company, all you'd need to do it offer up research reports at $500,000 a copy describing the state of the industry :-)
I am in awe of how amazingly clever this whole scheme is!