As technology and innovation drive new business models, investors are increasingly looking for alternative investments outside the traditional exchanges. Private companies have become an attractive investment opportunity for investors who want exposure to growth companies before they reach the stock market.
But what does it actually mean to invest in private companies, and why might it be an interesting alternative? In this article we look at the benefits, the risks and the process of selling and buying unlisted shares.
What are private companies?
Private companies are not traded on a regulated exchange. Many companies choose to remain private to avoid the extensive regulations and costs that a listing entails.
For investors, this represents an opportunity to gain access to companies in early growth phases by buying so-called secondary shares – shares sold by existing owners rather than issued by the company itself.
What are secondary shares and secondary trading?
Secondary shares give investors the chance to buy shares from existing shareholders rather than through new share issues. This means new investors can gain access to companies without the company needing to issue (create) more shares – which is often a more flexible and faster way to invest in private companies.
Benefits of investing in private companies
Potential for high returns – Many of today's most successful companies, such as Klarna and Spotify, were once private. Investing early can mean significant upside.
Exclusive access to new industries – Private companies offer the chance to invest in innovative and niche businesses before they reach broad market exposure.
Portfolio diversification – Investments outside the exchange can provide a more balanced portfolio and reduce exposure to the volatility of public markets.
Risks to consider
Limited liquidity – Unlike listed shares, it can be harder to buy and sell shares in private companies, as they lack an open market.
Lower transparency – Because private companies are not subject to the same reporting requirements as listed companies, there may be less information available to investors.
Higher risk – Private companies are often at an earlier stage of development, which means greater uncertainty about future growth and profitability.
How do I invest in private companies?
Identify investment opportunities – Unlisted shares are often offered through private networks, brokerage firms or via platforms specialising in secondary trading.
Analysis – A thorough review of the company's finances, business model and market potential is crucial. It is important to examine the company's governance, competitive situation and any regulatory risks.
Contract negotiation and purchase – Once an agreement is reached, a contract is drawn up between buyer and seller. Legal advice is recommended to ensure all terms are clear. If you buy or sell unlisted shares via Accumeo, we help with drawing up the contract.
Where can I invest in private companies?
Private equity funds – Specialised investment funds that pool capital from several investors to buy stakes in private companies. The minimum investment is often high, typically from SEK 50 million and up.
New share issues – Investors with experience and capital can sometimes subscribe for shares directly from the company. This often requires contacts within the company and a higher minimum investment (SEK 1–10 million).
The secondary market – Platforms such as Accumeo make it possible to buy and sell shares in private companies before they are listed. This offers a more accessible route for investors to enter private companies.
If you have further questions about investing in private companies, you are welcome to get in touch.
Our platform makes it easier to invest in private companies smoothly. We offer shares such as Kaunis Iron, Blykalla, Exeger, Klarna and OpenAI.
