Why Smart Money Is Flirting With TikTok Shares in Private Markets

The TikTok Growth Story You Can’t Ignore

Let’s cut through the noise – when an app gets 1.5 billion people hooked globally (that’s nearly 20% of Earth’s population!), investors sit up. But here’s what most miss: TikTok’s US user base quietly crossed 150 million last quarter. That’s more people than own dogs in America. Why does this matter? Because private equity firms are paying attention to that sticky user engagement – the kind that keeps people scrolling 95 minutes daily on average.

Private Equity’s Secret Playbook

I’ve seen countless investors make the same mistake – they wait for IPOs while the real action happens backstage. Private markets let you buy slices of TikTok through special vehicles before the Wall Street circus arrives. Think of it like getting backstage passes to a concert versus watching the livestream.

	Public Markets	Private Equity
Minimum Investment	$50-$500	$250k+
Volatility	High	Moderate
Information Access	Public filings	Direct financials

How the Pros Play This Game

Let me walk you through how my client Sarah locked in her TikTok position last spring. She worked through a feeder fund that aggregated $85 million from 35 investors. Their play? Securing preferred shares with 1.25x liquidation preference. Translation: If TikTok goes public or sells, Sarah’s group gets paid first before common shareholders.

The Risk/Reward Tightrope

Don’t get me wrong – this isn’t free money. The liquidity crunch is real. I’ve seen investors stuck in positions for 5+ years. But when it works? Oh boy. Take Reddit’s 2021 private round – early backers are sitting on 300% paper gains as I write this.

Getting Your Ticket

Here’s the step-by-step most platforms don’t tell you:

1. Prove you’re accredited (think $1M+ net worth or $200k+ income)
2. Find a SPV (Special Purpose Vehicle) aggregating TikTok shares
3. Negotiate preferred terms – liquidation preferences matter!
4. Wait out the holding period (typically 3-7 years)

Who Should Take the Plunge?

This isn’t for everyone. If you need liquidity in the next 2 years, swipe left. But for patient capital? The numbers speak:

Platform	PE Entry Year	Multiple on Exit
Instagram	2011	103x
WhatsApp	2013	55x
TikTok	2023	Projected 15-30x

The Bottom Line

Look, I’m not saying mortgage your house for TikTok shares. But if you’ve got dry powder and FOMO about missing the Facebook/Google waves? Private markets might be your last chance to ride the social media rocket ship before it goes public. Just remember – diversify, do your DD, and maybe take a cold shower before wiring funds.