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Navigating Private Markets: Strategies for Building Your Portfolio
Richard Hadler here from Founders Capital. We scour Europe for the top 1% of Start-ups led by epic Founders, giving them access to our world-class investor & partner network to scale their ventures to heady heights.
The private markets are often overlooked in wealth-building, yet they offer a powerful path to growth when approached with strategy, discipline, and patience. Founders Capital members range from seasoned private market investors to those just starting out—but all are accomplished business leaders and entrepreneurs, giving them a unique advantage.
I’m frequently asked about my own approach to private market investing and portfolio construction, so I thought I’d share some insights.
Ultimately, Investors come in all types, each with their own unique approach to risk. Some embrace bold, high-stakes opportunities, while others prefer a steady, measured path. This diversity is a strength, bringing varied perspectives to the table. However, regardless of your risk tolerance, there are certain foundational principles that every private market investor should consider. Think of them as guideposts—helping you make informed, strategic choices and navigate the complexities of private market investing with confidence.
While there’s no “one-size-fits-all” formula, and certainly no guaranteed 100x returns, there are foundational steps that can set you up for success.
Here’s my take:
1. Diversify, Diversify, Diversify
In private markets, diversification isn’t just wise—it’s essential. The aim isn’t to scatter your capital across as many deals as possible but to build a portfolio that balances risk and opportunity. Imagine your investments as a football team: you don’t want a squad of only goalkeepers. You need a mix of star strikers (those high-risk, high-reward early-stage startups) and reliable defenders (later-stage deals with shorter timelines). By mixing industries, types of founding team, and business models, you’re spreading risk and setting yourself up to capture a wide array of opportunities.
And remember, it’s not usually the first deal you make that becomes your star player. In private markets, often a small number of investments drive most of the returns. By diversifying, you increase your chances of landing on that “one-in-lots” unicorn.
2. The Importance of Stage Variety: Seed to Pre-IPO
At Founders Capital, we don’t just stick to one stage—we give you the chance to invest across Seed, Series A, all the way to Pre-IPO opportunities.
Why?
Because a balanced portfolio includes different types of bets. Early-stage deals like Seed rounds can be more of a slow-burn, high-reward play, while later-stage investments (like Pre-IPO) are more likely to return cash sooner.
Think of it like planting a garden. Some seeds take years to bloom, but the payoff can be incredible. Meanwhile, a few mature plants might bear fruit quickly, so you get a steady stream of “returns” over time. Having a variety of investment stages means you’re not left waiting ten years for everything to pay off—there’s a steady rhythm of returns to recycle back into new opportunities.
3. Keep Ticket Sizes Consistent
It’s easy to get starry-eyed over a particularly exciting startup and throw more money at it, but that can lead to uneven returns and outsized risks. At Founders Capital, we recommend keeping your ticket sizes consistent—and a good way to do this is to set limits by stage. For instance, you could do £5k for Pre-Seed deals, £10k for Seed, and £25k for Late-Stage.
Imagine you have £100k to invest over the next 12 months. You’d split this according to your stage limits, ensuring each deal has an appropriate portion of your capital. If you’re investing £500k, you’d scale those tickets proportionally. Setting these rules up front keeps things balanced and keeps you from getting swept up in the “excitement” of any single deal.
4. Do Your Homework: Learn What Good Looks Like
Before jumping in, it’s worth spending time to understand what a strong deal looks like at each stage. The private market can feel like a treasure hunt, and while there are plenty of shiny objects, not all of them are gold. Get familiar with the kinds of metrics that signal a company’s health and potential, like revenue growth, customer acquisition costs, and cash burn rates.
For instance, if you’re looking at a Seed round, a company with some early revenue traction and a growing customer base could be a promising pick. But by the Series A stage, you’d want to see strong, predictable growth and a clear path to scaling. This research is like building your private market “spidey sense”—the more you know, the better you’ll get at spotting diamonds in the rough (although I guarantee you'll never be perfect!)
5. Deploy, Then Hit Pause
One of the toughest parts of private market investing is patience, and this is where a clear game plan really helps. Rather than rushing in with all your capital, consider deploying over a 12- to 18-month period to build a well-rounded portfolio. Then, give yourself time to pause and assess for the same amount of time—12 to 18 months—to see how those investments are performing.
It’s like cooking a multi-course meal. You don’t keep throwing ingredients into the pot; sometimes, you need to step back, let things simmer, and see how it’s all coming together. By pausing, you can better evaluate what’s working and what isn’t, giving you the insight to refine your investment thesis and make more informed decisions on your next round of deals.
Private market investing isn’t about chasing fast returns—it’s about taking a disciplined, long-term approach that balances risk and opportunity. By building a diverse portfolio, staying disciplined with ticket sizes, knowing what good looks like, and taking time to evaluate your progress, you’ll be setting yourself up for success in the private markets.
At Founders Capital, we provide you with highly vetted deal flow, giving you access to the top 1% of opportunities we review each month. You can also invest with confidence knowing that every deal we bring forward is one we’re personally backing ourselves. However, we’re not a fund, and we don’t make the decisions for you; our role is to empower you with the best possible opportunities. Ultimately, it’s up to you to shape your own investment portfolio in a way that aligns with your goals and strategy.
Until next time!
Cheers,
Rich