Categories: Base Metals / Energy / General Market Commentary / Precious Metals
Topics: General Base Metals / General Energy / General Market Commentary / General Precious Metals

How to Invest in Quality Private Placements by Nick Hodge

 

When I started my private placement letter just over two years ago, it was one of the first of its kind.

Until then, no one had really brought quality private deals to the retail investment crowd. It was even a bit taboo.

But I saw an opportunity.

An opportunity to bring accredited retail investors investments they had never seen before — and likely would never see without a service like Nick’s Notebook.

Through years of hard work, network building, taking my lumps, and “calling like I see it,” I found myself in a very unique position: quality companies and people wanted me and my readers in their deals.

I’ve used the word “quality” twice now.

Not all deals are created equal. It takes experience, diligence, and a network of trustworthy people to create and vet deals that can be wins for all involved.

We hit the ground running.

One of the first deals we did in 2015 was in an up-and-coming lithium company. It was before the lithium mania of 2016, and it was being backed by several mining entrepreneurs with previous exits in the hundreds of millions or billions of dollars.

We financed Lithium X (TSX-V: LIX)(OTC: LIXXF) at $0.15 when it was still a private company, knowing it would IPO just as the lithium story was hitting the mainstream. Its IPO dovetailed perfectly with a sharp rise in lithium prices and investor interest, and we were able to sell our shares for $2.37 each — a gain of 1,480%.

We financed K92 Mining (TSX-V: KNT)(OTC: KNTNF) in early 2016 at $0.35. It was also a private company with a clear path to IPO. It had a large gold mine in Papua New Guinea that it bought for pennies on the dollar in the mining downturn, and it was on the verge of production, with exploration upside as well. Its shares began trading in May 2016, and by August we were able to exit at $2.21 — a gain of 531%.

You get the idea. We’ve closed six other triple-digit winners as well.

We are sitting on six additional triple-digit winners in the open portfolio.

It’s not easy. And that’s the point of this missive.

Many of the so-called private deal letters that have popped up since I created Nick’s Notebook will recommend any deals they can get their hands on. They have neither the network nor the ability for the diligence I do to deliver a consistent stream of high-quality private placements.

 

 

In fact, I’ve seen some of these letters charge readers like you to get access to deals you can find on public website like GoFundMe or Kickstarter. Make no mistake, if a company has taken to a website like that to raise capital, then it is not a high-caliber deal. It means it couldn’t raise money privately in the capital markets.

And it also means it has no real path to a successful exit for you.

Be very careful when investing in deals like that. Without a clear path to trade on the public markets via initial public offering (IPO) or reverse takeover (RTO), your money can be locked up for a long time with no way to appreciate and no way to get it back.

In one of our more recent Nick’s Notebook deals, we funded a private uranium company at $0.15 that was being run by a team that took a uranium stock to over $8.00 in the last bull uranium cycle. We financed it in February of this year, and it just IPO'd this month at $0.50 — a gain of 233%. And that one is just getting started.

Not all private placements are created equal. Neither are private placement letters.

This week I will be unveiling a new private deal in the medicinal marijuana space. It has a platform for cannabidiol (CBD) that is more robust than several currently out there. Companies with lesser platforms that are currently public are fetching valuations in the hundreds of millions or higher.

To continue reading please click link https://www.outsiderclub.com/how-to-invest-in-quality-private-placements/2395