Table of Contents
Private equity used to feel like a club reserved for millionaires, hedge funds, and wealthy insiders. For years, most everyday investors could not access private companies before they became publicly traded. That has started to change.
Today, you can invest in parts of the private equity world without meeting the strict requirements of being an accredited investor. Thanks to newer investment platforms, specialized funds, and alternative assets, regular investors now have more ways to gain exposure to growing private businesses.
That does not mean every opportunity is safe or guaranteed to make money. Private equity investing can still involve high risks, limited liquidity, and long holding periods. But if you understand your options, you can slowly build exposure to private markets without needing a massive net worth.
In this guide, you will learn the top ways to invest in private equity as a non-accredited investor, including the pros, risks, and what makes each option worth considering.
Quick Summary Table 📊
| Investment Method | Typical Minimum Investment | Risk Level | Liquidity | Best For |
|---|---|---|---|---|
| Private Equity ETFs | Very Low | Moderate | High | Beginners |
| Business Development Companies | Low | Moderate | High | Income investors |
| Interval Funds | Moderate | Moderate to High | Limited | Growth-focused investors |
| REITs With Private Holdings | Low | Moderate | High | Real estate exposure |
| Crowdfunding Platforms | Low to Moderate | High | Low | Startup investing |
| Venture Capital Funds for Retail Investors | Moderate | High | Low | Growth focused investors |
| Secondary Market Platforms | Moderate | Moderate | Medium | Diversification seekers |
| Small Business Investment Platforms | Low | High | Low | Community investors |
| Holding Companies | Low | Moderate | High | Stock market investors |
| Private Equity Focused Mutual Funds | Low | Moderate | High | Hands off investors |
How We Ranked These Investment Options 🧠
We evaluated each option using several important factors that matter to everyday investors:
- Accessibility for non-accredited investors
- Low minimum investment requirements
- Long-term growth potential
- Liquidity and ease of selling
- Historical performance potential
- Transparency and investor protections
- Diversification opportunities
- Fees and hidden costs
- Risk level for average investors
- Ease of understanding for beginners
1. Invest in Private Equity ETFs 💼
Private equity exchange-traded funds are one of the easiest ways to gain exposure to the private equity industry. These ETFs usually hold shares of publicly traded private equity firms, investment managers, and companies involved in alternative assets.
You are not directly buying ownership in private startups. Instead, you are investing in companies that profit from private equity activity.
This option is popular because it works just like buying a normal stock. You can purchase shares through a regular brokerage account with very little money.
Benefits include:
- Easy access for beginners
- Instant diversification
- Lower costs than direct private equity investing
- High liquidity
- No long lockup periods
The downside is that your returns may not perfectly match actual private equity performance because these ETFs trade on the public market and react to overall stock market conditions.
Still, this is one of the safest and simplest starting points for regular investors.
2. Buy Shares of Business Development Companies 🏦
Business Development Companies, often called BDCs, are publicly traded firms that invest in smaller private companies. Many of these businesses are not available on stock exchanges, which gives you indirect exposure to private markets.
BDCs often lend money to growing businesses or take equity stakes in them. In return, they generate income from interest payments and investment gains.
One major reason investors like BDCs is income. Many of them pay high dividend yields compared to traditional stocks.
Advantages include:
- Available through stock brokerages
- High dividend potential
- Exposure to private middle-market companies
- Lower entry barriers
However, BDCs can be volatile during economic downturns because smaller businesses often struggle more during recessions.
If you want income while gaining private market exposure, BDCs can be a strong option.
3. Explore Interval Funds 📈
Interval funds are less well-known but increasingly popular among retail investors looking for alternative investments.
These funds invest in assets that traditional mutual funds usually avoid, including:
- Private companies
- Private credit
- Real estate debt
- Infrastructure projects
Unlike regular mutual funds, interval funds limit when you can withdraw your money. They may only allow redemptions quarterly or a few times each year.
That reduced liquidity helps fund managers invest in long-term opportunities that may offer higher returns.
Why investors consider them:
- Access to institutional-style investments
- Professional management
- Diversification beyond stocks and bonds
- Lower barriers than traditional private equity funds
You should still carefully review fees and withdrawal rules before investing because interval funds are designed for patient investors.
4. Invest in REITs With Private Market Exposure 🏢
Some real estate investment trusts own or finance private commercial properties that are not directly accessible to regular investors.
These REITs may invest in:
- Apartment complexes
- Data centers
- Industrial warehouses
- Healthcare properties
- Private real estate developments
While REITs are not pure private equity investments, they provide access to alternative assets that often behave differently from standard stocks.
This option works well if you want:
- Real estate diversification
- Dividend income
- Exposure to private property markets
- Lower investment minimums
Publicly traded REITs are especially beginner-friendly because you can buy them just like stocks.
Keep in mind that real estate can still experience downturns during periods of high interest rates or economic weakness.
5. Use Equity Crowdfunding Platforms 🌱
Equity crowdfunding has opened the door for everyday investors to support startups and small businesses online.
Through these platforms, you can invest relatively small amounts into private companies that are raising capital from the public.
This creates opportunities to invest early in companies before they become large businesses.
Potential benefits include:
- Very low minimum investments
- Access to startup investing
- Ability to support industries you believe in
- Potential for large long-term gains
But there are major risks.
Many startups fail, and your investment could become worthless. These investments are also highly illiquid, meaning your money may be tied up for years.
Crowdfunding works best when you spread small amounts across multiple companies instead of betting heavily on one startup.
6. Look for Venture Capital Funds Open to Retail Investors 🚦
Some investment firms now offer venture capital-style funds that accept non-accredited investors under specific rules and structures.
These funds usually invest in early-stage technology companies or fast-growing private businesses.
Instead of selecting startups yourself, professional managers handle the investment decisions.
This approach can help you avoid some beginner mistakes while still gaining startup exposure.
Advantages include:
- Professional portfolio management
- Access to high-growth sectors
- Diversification across many startups
- Lower research burden for investors
However, venture capital investing remains risky even with experienced management. Returns can take many years to appear, and some funds may underperform public markets.
You should view venture investing as a long-term strategy rather than a quick profit opportunity.
7. Invest Through Secondary Market Platforms 🔄
Secondary market investing allows you to buy shares in private companies from existing investors rather than directly from the company itself.
Some platforms now offer limited access to non-accredited investors through pooled structures or special investment vehicles.
This can provide exposure to companies that are already more established than early startups.
Potential advantages include:
- Access to mature private companies
- Reduced startup risk
- Opportunity to invest before IPOs
- Broader diversification
The challenge is that secondary investments can still be expensive, complex, and difficult to sell quickly.
You should carefully review platform fees, valuation methods, and holding periods before investing.
8. Support Small Businesses Through Investment Platforms 🛍️
Certain platforms let you invest in local or small businesses through revenue-sharing agreements or community investing programs.
Instead of buying traditional stock ownership, you may receive returns tied to business revenue or growth.
This option appeals to investors who want:
- Community involvement
- Direct business exposure
- Smaller investment amounts
- Alternative income streams
These investments can feel more personal than traditional investing because you may directly support restaurants, stores, or local entrepreneurs.
The risks are significant, though. Small businesses can struggle with competition, economic downturns, and cash flow problems.
You should only invest money you can afford to leave untouched for several years.
9. Buy Shares of Public Holding Companies 🏛️
Some public companies operate similarly to private equity firms by buying, managing, and growing private businesses.
When you buy shares of these holding companies, you indirectly gain exposure to private investments.
This strategy combines:
- Stock market liquidity
- Professional management
- Diversification
- Access to private business growth
Holding companies often own businesses across multiple industries, which can reduce concentration risk.
This method may not provide the excitement of startup investing, but it can offer more stability and lower risk compared to direct private company investing.
For many conservative investors, this is a practical way to enter the private equity world.
10. Invest in Mutual Funds With Private Equity Exposure 🎯
Some mutual funds include allocations to private companies, venture-backed businesses, or firms involved in private markets.
These funds blend traditional investments with alternative assets to create broader diversification.
Benefits include:
- Easy access through retirement accounts
- Professional management
- Lower minimum investments
- Automatic diversification
Because these are regulated investment vehicles, they may also provide stronger investor protections than certain alternative investment platforms.
The tradeoff is that private equity exposure may only represent a small portion of the overall fund.
Still, for investors who prefer simplicity, this can be an excellent low-stress option.
Conclusion 🌟
You no longer need to be wealthy to access parts of the private equity market. Modern investing platforms and financial products have created new opportunities for regular investors to participate in private business growth.
That said, private equity investing still comes with real risks. Many investments are less liquid than stocks, harder to value, and more volatile over long periods.
The smartest approach is usually gradual exposure. Instead of chasing risky startup bets right away, you can begin with more accessible options like private equity ETFs, BDCs, or diversified funds.
As you gain experience and confidence, you may decide to explore crowdfunding platforms, interval funds, or venture capital products.
The key is balancing growth potential with risk management so your investments support your long-term financial goals instead of creating unnecessary stress.
Frequently Asked Questions ❓
Can you legally invest in private equity without being accredited?
Yes, you can. Certain investment products and platforms are specifically designed for non-accredited investors. These include ETFs, BDCs, crowdfunding opportunities, and some interval funds.
Is private equity riskier than the stock market?
In many cases, yes. Private equity investments are often less liquid, less transparent, and harder to value than publicly traded stocks. Some investments may also take years before generating returns.
How much money do you need to start investing in private equity alternatives?
Some options allow you to start with less than $100, while others may require several thousand dollars. Publicly traded ETFs and BDCs usually have the lowest entry barriers.
Are private equity investments good for retirement accounts?
Certain private equity-related funds can work inside retirement accounts, especially ETFs, mutual funds, and some alternative investment products. However, highly illiquid investments may not fit every retirement strategy.
What is the biggest mistake beginners make with private equity investing?
One of the biggest mistakes is investing too much money into a single startup or private deal. Diversification is extremely important because many private companies fail before becoming profitable.
