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
With Twitter recently announcing its IPO plans via a tweet, the media outlets have been having a field day discussing the biggest IPO since
. 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
. 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,
, 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
. The company seems to have unusually clear foresight with early investments in companies such as Facebook and
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.
GSV Capital is the brainchild of "in the loop" CEO Michael Moe. I know him personally. Moe has a long history on Wall Street with stints in investment banking, research and sales. He lives and works in Silicon Valley, and to some degree this accounts for the amazing investment portfolio of GSV Capital.
The firm has capital but, more to the point, through coaching or going to Happy Hour at the Old Pro bar or supporting civic initiatives, Moe congenially rubs elbows with all of the entrepreneurs in the Valley that need capital and are building great (and sometimes not so great) companies.
For better or worse, Silicon Valley is a world to which most of us don't have access. As a result, we are outside the glass, wide-eyed and looking in. But with companies like GSV Capital, it's like getting a seat at the Old Pro bar where, just maybe, the Twitter deal was clinched over a second round of Gordon Biersch Pilsners.
I would be remiss if I didn't say that just because you can access some of the hottest Silicon Valley creations through GSV Capital, it doesn't mean you should. Not every investment is right for every investor. Prudent investing relies on an allocation of assets across several industries.
I would characterize an investment in GSV Capital as part of a private equity allocation, which, in and of itself, carries significant risks and is generally not included at all in portfolios built for income or capital preservation. As an investor, you need to evaluate your personal level of risk tolerance and make sure an investment like GSV lines up with your overall plan.
At the time of publication the author had no position in any of the stocks mentioned.
This article was written by an independent contributor, separate from TheStreet's regular news coverage.
Steve Cordasco is a principal at
and host of CBS Radio's
The Big Money Show
, a weekly radio program on 1210 AM WPHT.
Cordasco has been helping investors reach their financial goals for over 20 years. A graduate of Temple University's Fox School of Business, where he earned a Bachelor's degree in finance and real estate, he is a Registered Investment Advisor and Registered Representative. He holds the Series 7, 63, 65 licenses along with an insurance license.
Barron's, a national financial newspaper, continues to rank Cordasco in the top 10 for Pennsylvania on its annual list of America's top financial advisors. Cordasco maintains strong ties to Temple University, where he is an associate professor in Temple's School of Engineering. He is also involved with charitable organizations including, Cooper Hospital Foundation, Christ the King Regional School Parish Council and School Board, Temple University Fox School of Business Investment Association.