Recent IPO wave has advisors talking tech, venture capital with clients

investmentnews.com:

The IPO window is open, or at least it’s noticeably ajar. So what does that mean for financial advisors whose clients are interested in venture capital and seek to invest in a company before its shares hit the big board?

Despite the recent sell-off in stocks, a number of high-profile new issues have hit the market of late. This rising river of initial public offerings has energized many investors into believing that the long-halted venture capital industry is once again flowing. Recent IPOs like Instacart, Klaviyo and Arm Holdings may be struggling to sustain their post-debut gains, or even their initial offering prices, yet they’re still sparking conversations between advisors and clients.

“For clients that are not directly working at these early-stage companies and are looking at other ways to diversify their investments, this area might be a good place to look. A lot of innovative companies are hesitant to explore the public markets and are staying private for longer, increasing their valuations before they go to market,” said Jack Heintzelman, financial planner at Boston Wealth Strategies.

Heintzelman advises a number of clients who work at early-stage biotech and tech companies, so he’s well versed in the risks and rewards of VC investing. He highlights the fact that early-stage companies tend to grant equity to their employees, thus causing some of his clients to become overly concentrated in a single investment.

“We look at this as a portion of their overall investment strategy,” Heintzelman said. “It all starts with the specific goals and aligning the strategy with each individual goal. If it’s a shorter-term goal with a higher priority, you might want to reduce the overall risk to an investment that is more