5. Why Most People Should Not Start Here

Private markets are powerful — but they are not the starting point for most wealth builders. They require capital, judgment, network access, and time horizons that beginners simply don’t have yet.

Private investing becomes an advantage after you have wealth, not before.

Here is the clean, objective breakdown.

1. Illiquidity — Your Money Is Locked Up for Years

Unlike public markets, where you can sell instantly, private investments often lock capital for:

• 5–10 years in venture and private equity

• 3–7 years in private credit

• Undefined timelines in angel investments

If you need liquidity, optionality, or stability early in your career, private markets work against you.

2. High Failure Rates — Especially in Early-Stage Investing

Angel and venture investments often follow a power law:

• 1–2 winners

• several break-evens

• many zeros

This requires:

• portfolio construction

• pattern recognition

• emotional resilience

• capital you can afford to lose

Beginners typically cannot absorb multiple losses.

3. High Minimum Capital Requirements

Private deals often require:

• $25k–$250k checks

• follow-on capital

• capital calls

• diversification across many deals

This is inaccessible — and dangerous — unless you already have meaningful wealth.

4. Requires Deep Network Access

The best private deals never appear on public platforms. They come through:

• founders

• CEOs

• VCs

• bankers

• investment groups

• operator networks

If you don’t have access, you see only the lowest-quality deals.

Access is a moat in private markets.

5. Requires Highly Developed Judgment

Private deals do not come with the transparency of public companies. You must judge:

• founders

• markets

• incentives

• unit economics

• governance

• terms

This judgment comes from:

• years of operating

• years of evaluating businesses

• seeing many deals fail

• understanding incentives deeply

Beginners simply haven’t built this muscle yet.

The Bottom Line

Private markets are not a beginner’s path to wealth.
They are a later-stage path for people who:

• already own assets

• already built or ran businesses

• already understand risk

• already have liquidity

• already have networks that filter quality deals

This path is powerful — but only at the right stage.