SAN FRANCISCO, July 9 San Francisco-based 137 Ventures said it has raised $137 million for its second fund, underscoring the eagerness of investors to buy shares in start-ups before they hold initial public offerings.
The firm, which buys private-company shares from company founders, early employees, and other investors, counts hot companies like data-analytics business Palantir, space-exploration business SpaceX and blog site Tumblr among its portfolio. Tumblr sold to Yahoo! Inc last year for $1.1 billion.
With start-ups staying private longer than a decade ago, many investors believe they are missing out on big gains that they could have once captured through public shares.
In the past, the opportunity to invest in start-ups went largely to venture capitalists.
But increasingly, start-up companies are creating mechanisms where early shareholders can cash out through tightly controlled sales to approved buyers such as 137 Ventures or other outlets such as SecondMarket.
Investors in 137 Ventures tend to be wealthy individuals, family offices and the like, said Justin Fishner-Wolfson, co-founder and managing partner.