For the average investor, Silicon Valley's latest crop of fast-growing start-ups may seem out of reach. But with more money flowing from nontraditional venture capital investors into start-ups, anyone with a pension can now tap into the "magical" growth of the so-called dedacorns, private tech companies with valuations more than $10 billion.
Have you checked your 401(k) asset allocation recently? U.S. mutual funds, including T. Rowe Price and Fidelity, are investing in start-ups. And they're getting in on both early and late-stage rounds, sometimes called "private IPOs."
"Mutual fund managers don't want to wait for the IPOs and miss out on the growth these companies are experiencing now, which is why some have upped their exposure to private companies," said Morningstar analyst Katie Reichart.
According to data from Morningstar, U.S. mutual funds have invested billions in Silicon Valley's 10 most highly valued tech start-ups. The biggest — in terms of valuation — are consumer apps (think Uber, Airbnb, Snapchat, Pinterest and Dropbox), companies analyzing the present (Palantir), inventing the future (SpaceX) plus three foreign firms you may, or may not, have even heard of (Xiaomi, Flipkart and Didi Kuaidi).