NEW YORK ( TheStreet) -- Want to get in on owning Twitter shares before its initial public offering? Good luck!
The possible Twitter IPO is anticipated to be a "hot deal." Only investors who have the best relationship with their brokers will get a chance at purchasing shares. If you can handle the risk of speculative IPO investing there is another way to get indirect access and exposure -- by way of publicly traded private equity funds such as GSV Capital (GSVC).
With Twitter recently announcing its IPO plans via a tweet, the media outlets have been having a field day discussing the biggest IPO since Facebook (FB). Twitter executives are looking to avoid the mess that surrounded the botched Facebook IPO. For starters, Twitter decided to pick a different lead investment bank in Goldman Sachs (GS). Also, unlike Facebook, it is keeping many of the details of the deal private and limiting the number of shares that will be available to the public.
At this point, the only way to personally grab Twitter shares is to become an approved investor through an interview process with Twitter executives.Based in Woodside, Calif., GSV is a publicly traded fund that seeks to invest in high-growth, venture-backed, private companies and owns approximately $37 million of Twitter. In fact, the largest holding in GSV Capital's portfolio is Twitter, which makes up 15.1% of the fund. By buying shares of GSVC, you are, de facto, gaining exposure to shares of Twitter. More important than the Twitter play, however, is that with GSV investors can also position themselves to capitalize, in similar fashion, on some of hottest upcoming IPOs, just like private equity investors -- but with liquidity thrown in for good measure. That's because GSV Capital also owns stakes in Spotify, Coursera, Dropbox and Palantir. The company seems to have unusually clear foresight with early investments in companies such as Facebook and Zynga (ZNGA) that eventually went public. GSV still owns a position in Facebook but did sell half of its shares as GSV capitalized on the recent rebound in stock price.
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