Editorial credit: Simlinger / Shutterstock.com
It’s a lot easier for the rich to get richer than it is to go from rags to riches, but a new crop of startups are looking to even the playing field.
Outside the stock market there is a world of ways the ultra-wealthy store and grow their wealth. From fine art to fine wine and vintage cars to baseball cards, collecting high-value items has been a way for many in the upper echelons to acquire status symbols and put their money to work.
For instance, take this 1952 Mickey Mantle baseball card. The mint condition card was bought for $2.88 million in 2018 and sold for $5.2 million just this year, giving its owner a pretty hefty return on their investment. While many people also share an interest in baseball cards and other collectibles it isn’t always possible for them to use this knowledge to grow their bank accounts. Much of this is due to the high upfront cost required to initially acquire one of these assets.
But the era of exclusivity could be drawing to a close as a host of startups have sprung up to democratize the process.
The many of these startups work by raising capital to buy a collection high-priced assets. They then offer the assets to their users who can then buy fractions of the item in a similar way one would purchase shares of a company. This principle allows anyone with a few dollars to become a part-owner of a vintage Ferrari, painting, or a rare sneaker that could appreciate in value.
So in a time when investors are flocking to digital assets like cryptocurrencies and NFTs, who are these alternative investment companies giving people the chance to invest in tangible assets? Let’s meet a handful of the leading startups in the space.
Rally got its start in 2017 as Rally Road with a focus on vintage cars. The company has since opened its platform to a wider array of assets like dinosaur bones or a signed, first-edition copy of “African Game Trails: An Account of the African Wanderings of an American Hunter Naturalist” by Theodore Roosevelt. The company, led by CEO George Leimer, offers equity shares in assets like these for as little as $50. Rally raised $17 million in funding in September 2020 bringing the total raised the alternative investment startup to $27 million.
In much the same way that Rally has brought cars and collectibles into the portfolios of everyday investors, Rares is making high-priced sneakers the next big investment trend. The startup first broke onto the scene in April 2020 and offers sneakerheads a stake in high-profile and high-value footwear. The company recently made a name for itself by acquiring Kanye West’s prototype Yeezy sneakers that he wore to the 2008 Grammy Awards for $1.8 million.
Wine is one of the worlds oldest luxuary asset classes and is still used to store wealth when it isn't being paired with a good meal. In fact, in the past 30 years, wine has outperformed the S&P 500 and even managed withstand the 2008 financial crisis. Vinovest has been helping the average investor add wine to their portfolio since its inception and has even created the Vinovest 100 Index is a proprietary index that tracks the fine wine market. The index’s components include wine prices from major regions such as Bordeaux, Burgundy, Champagne, Rhone, Tuscany, Piedmont, California, Australia, Spain, Portugal, and others.
Otis calls itself “the stock market for culture” and just like other entries on this list allows users to auy and sell shares of collectibles, sneakers, and art. Otis uses a combination of quantitative analysis and industry expertise to curate a collection of high-quality, culturally significant assets that it believes will appreciate in value. Some of the company’s current offerings are a 2003 Lebron James rookie card, which users can scoop up for $10 per share upon its IPO, as well as artwork by Banksy. The company also includes extensive research and financial analysis on each of the assets it acquires, allowing potential invetsors to do their own homework.
The Org is a professional community where transparent companies can show off their team to the world. Join your company here to add yourself to the org chart!
Access the full article
Create a free profile on The Org to go behind the scenes of the world's most innovative teams