A video on the topic from CNBC from last August on the topic - definitely an area I am spending more time learning about.
Ever feel like venture capital is exclusive to the wealthy Fortunately, there is a way for all investors to participate in the medium. On The Strategy Session yesterday, we detailed a trading tool for the investment of upcoming businesses.
My "Call-to-Action" is to explore and consider Business Development Companies (BDC's) for your portfolio. BDC's are public firms that invest in small businesses the way a venture capitalist would. They can be bought on the open market, and here's the best part.
Janney Montgomery reports that the average yield on a BDC is 9.7 percent. Remember, we have been discussing ways on The Strategy Session and right here in the K-Call about how in this low-rate environment, investments that return income are extremely attractive. Falling into this category are MLP's, REITS, and high-dividend yielding stocks. Add BDC's to this list.
On yesterday's show, Lawrence Golub of Golub Capital BDC (and husband of our Fast Money friend, Karen Finerman) made an important distinction between BDC's now and in 2008. When I asked him about the collapse of American Capital Limited (ACAS) and Allied Capital Corporation (ALD), Golub pointed out that the loan structure is much improved since then.
Additionally, alignment of the fees, critical to success, has sharpened. Shareholders get more for what they paid than they did two years ago. If you ever wanted to be a venture capitalist, or simply invest like one, BDC's are high-yielding products that can capture share of that universe.