Early in our SpaceX investing, a signed deal fell apart. Prices rose, replacement deals were hard to find, and investors kept calling, desperate to get in. But you can’t buy at any price. With few sellers and lots of demand, people started offering contracts like this: “I own SpaceX shares, maybe through a fund. Pay me today, and when SpaceX goes public I’ll sell and give you the cash.” What’s wrong with that? The seller can go bankrupt in the meantime, and you won’t get your money back.
With SpaceX, Perplexity, Scale and similar companies, there are criminals who will convince you they own shares when they don’t. Sometimes it’s worth paying a little more to actually get the shares, have your entity on the company’s cap table and be in contact with the company itself, not just a third-party broker. That’s why due diligence is so important.
Key points
- High demand and few sellers create openings for scams.
- Be wary of contracts promising cash or shares after the IPO instead of actual shares now.
- Some sellers don’t own the shares they claim to sell.
- Insist on getting on the cap table and confirming with the company, even if it costs more.
Accredited investors: learn about current opportunities at tickertapeinvestments.com.
