After merging with Elon Musk’s AI startup XAI, SpaceX is preparing for a $1.25 trillion IPO — but since the unit is still private, it’s out of reach for most everyday investors.
But Powerlaw Corp., a fund that holds stakes in buzzy and not-yet-public companies including SpaceX, OpenAI and Anthropic, is giving retail traders an early taste of what could be in store for them. As bloomberg reports$1.2 billion fund Announced in a regulatory filing He wants to give popular investors a buying opportunity.
“With the pool of capital in the private markets, the best companies are not choosing to go public,” said John Spinel, powerlaw investor and managing partner of Jazz Venture Partners. bloomberg. “This deprives the public of the ability to access high-growth companies.”
Powerlaw will act as the intermediary and charge shareholders a 2.5 percent management fee. The fund is planning a direct listing, which means it will sell existing shares to existing stockholders, unlike an IPO, which involves selling new shares to raise capital.
However, the fund will still need approval from the US Securities and Exchange Commission before it can proceed.
“Our investment objective is long-term capital appreciation,” the regulatory filing reads. “We seek to achieve our investment objective by investing in a concentrated portfolio of approximately 15 late-stage technology companies.”
PowerLaw’s portfolio includes six AI companies, including XAI, Perplexity, OpenAI and Anthropic, as well as forecasting markets platform Kalshi and even Palmer Luckey’s defense contractor Anduril.
“The fund reflects (parent company) Akkadian’s mission to democratize access to Silicon Valley’s leading technology investments,” the filing reads.
But there may be risks in availing the service. For one thing, when Powerlaw structures its trades, shareholders may not see immediate profits as these companies’ share prices rise. Closed-end funds also regularly trade at significant premiums to their actual holdings.
The information can also be difficult to obtain because privately traded companies like SpaceX and OpenAI are not required to publicly disclose financial details. And a more likely possibility: These hyped-up stocks could eventually crash for any number of reasons.
and a similar investment platform, called Linkto, which aims to allow accredited investors to invest in private and pre-IPO companies, filed for bankruptcy The inherent risks of trying to invest in private companies through an intermediary were further highlighted after it faced alleged security breaches in July last year.
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