Private company investments can produce hefty financial returns, which is why they are so attractive. A private company investment can also be quite risky, however, particularly if, as discussed in our recent post, the investor failed to obtain any type of buy-sell agreement (“corporate pre-nup”) at the time the investment was made and has no contractual exit right. Given the substantial level of risk involved in making a private company investment, it is fortunate that a wealth of good information is available for investors in private companies – for free – on the Internet. This post reviews five different websites that provide especially helpful information on a variety of financial and business topics for private company owners and investors to consider before and after making their investment in the company.
Online Resources for Private Company Investors
1. The Houston Business Chronicle
The Chronicle devotes some of its online focus to topics relating to small business issues and investing in private companies. This results in well-researched stories. Recently for example, the Chronicle presented a story titled, “The Top 10 Things a Minority Shareholder Should Look Out for in a Shareholder Agreement.” Here is a link to the article.
Another helpful article from the Chronicle was titled, “Can a Minority Partner Be Fired from a Partnership” which covers a very important topic to limited partners. Here is the link to the article.
The D&O Diary is an Online Journal focusing on director and officer liability. It is produced by Kevin M. LaCroix, an attorney and Executive VP of RT ProExec, which is a division of R-T Specialty, LLC. RT ProExec, an insurance intermediary that focuses exclusively on management liability issues. Kevin is a lawyer with extensive insurance coverage experience and more recently served as Pres. of Genesis Professional Liability Managers, a D&O underwriter and part of the Berkshire Hathaway group of companies.
This site includes articles and commentary of interest to both private and public company investors. It features commentary by Mr. LaCroix, and also includes articles from guests with specific expertise. Examples include a guest post last year commenting on the Texas Supreme Court’s decision in Ritchie v. Rupe titled: “Texas Supreme Court Guts Minority Shareholder Claims.” See this article here.
Investopedia bills itself as “the largest digital financial education platform.” The site includes a broad array of information and resources – everything from a dictionary of commonly used terms in finance and investing to articles on personal finance, acting trading and investing. It also includes tutorials on various topics.
Articles of interest to private company investors include, “What kinds of private equity investments are out there,” read more and “How to invest in private companies,” read more.
Valuewalk is a new site that features reports by global reporters responsible for breaking worldwide news on finance, business, politics, economy and technology. The site includes good articles for private and public company investors.
One featured article of interest to private company investors was titled: “Value Investing: Get Into the Private Company Mindset. Read more.
This site may be known to many readers. Brothers Tom and Dave Gardner focus on creating an online community of “fools” who invest with them to beat the returns of the “the street,” i.e., institutional investors. They and their team write in plain terms that are easily understood. Less well-known, perhaps, are the wealth of good articles that the site regularly includes on topics of interest to private company investors. This reference to the Motley Fool comes with an important warning – the brothers Gardner are relentless marketers and once they receive your email, you should expect frequent solicitations.
An example of a Fool article of interest to investors is “An investors guide to master limited partnerships” here.
Please leave a comment if there are other sites for private company investors you recommend that we add to this list.