Early Investing

Q&A: Tracking Startup Investments and Planning Your Bitcoin 401(k)

Q&A: Tracking Startup Investments and Planning Your Bitcoin 401(k)
By Early Investing
Date October 21, 2018

Editor’s Note: Welcome to the Early Investing Mailbag. Each week, we answer questions we think will help you learn about investing in pre-IPO startups and cryptocurrencies. If you have any questions for us, please email us at mailbag@earlyinvesting.com. Just remember, we can only answer your general questions for information and strategy. We can’t offer personal advice.

Q: I now have more than 30 investments in various startup companies. These include companies in SeedInvest, StartEngine, Netcapital, Republic, Wefunder, etc.

I would gladly pay a subscription fee for someone to track these. Some of these companies will fold. Some may be successful. Too many for me to keep track of. Any thoughts on having a service that keeps track of all these startups in a simplified manner for the investor?

A: I agree. Tracking multiple investments across different platforms is cumbersome. In fact, we’re building a tool to help our members do just that. It will allow you to track the latest company news, funding announcements, social media and more – all from one central dashboard.

Until that tool is ready, however, there are two tools I recommend for tracking startups.

The first is Owler. This is a free service that makes it easy to track private companies. You’ll have to sign up for an account and manually add the companies that you want to track.

After you get your portfolio onto Owler, you’ll receive email updates whenever your investments make news. Owler automatically reports on important events such as funding rounds and acquisitions.

The second tool is Google Alerts. You’ll need to sign in to your Google account. Then add the names of the companies you want to track. Any time those companies are in the news, Google Alerts will send you an email with the details. You can choose how often you want to be updated. (Note: Early-stage startups often don’t generate a lot of news. This is normal.)

Google Alerts is also very useful for tracking investment areas you’re interested in. For example, you can set an alert for “marijuana IPO” or “tech IPO.” Whenever Google finds interesting news in those areas, you’ll automatically be notified.

It can be an incredibly useful investing tool. For example, I happen to have a Google Alert for “marijuana IPO,” so I heard about Tilray going public way before it was on most investors’ radars. Unfortunately, I didn’t pull the trigger…

We’ll keep you updated as we make progress on the startup tracking tool.

+ Early Investing Co-Founder Adam Sharp

Q: I read somewhere that Fidelity is getting into bitcoin. I have a Fidelity 401(k) account. I’m a big believer in bitcoin. How much of my savings in this account do you recommend I switch over to bitcoin?

A: It’s great news that Fidelity has built a platform to make bitcoin investing easier for interested investors. But you’re jumping the gun a bit here. Fidelity is following a two-step process. The first step is helping out its institutional and wealthy clients. That will get going in earnest early next year. The next step – and I’m pretty sure I’m reading the tea leaves correctly – will be making its bitcoin-related services available to all its clients, regardless of how wealthy they are.

Unfortunately, Fidelity is offering no clues as to when that would be. My sense is that it could happen as soon as the end of 2019. I know that sounds like it’s pretty far away. But it’ll be here before you know it.

And isn’t it nice to know that a company as big and respected as Fidelity is blazing the path for other investment firms to follow? And those firms will follow. The days of jumping through hoops (or going to exchanges like Coinbase) to invest in bitcoin will soon be a distant memory.

I have a Fidelity account where I park some of my money. And I’m really looking forward to the convenience of switching over some of my U.S. dollar investments to bitcoin (and, I’m sure, other crypto coins) with a couple of strokes on my keyboard.

In the meantime, I’ll continue to use crypto exchanges. That’s the silver lining: In the absence of a convenient way to invest, investors are getting a big discount on the prices we pay for our crypto coins.

Lastly, let’s pretend that you could switch over some of your 401(k) savings to bitcoin. How much makes sense? That’s going to vary from person to person. I’d say 2% to 5% for newcomers to the bitcoin space. For those of you who’ve been following crypto longer and really have a good feel for the cryptocurrency market, you can increase that range to between 5% and 10%.

+ Early Investing Co-Founder Andy Gordon

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