Private Market Blowups Highlight Perils for Retail Investors (1)

Massage therapist James Lakin didn’t even know it was possible for outsiders to buy stakes in private companies until a client told him that he could be approved to do so on a platform called Linqto. Now, he’s one of thousands of retail investors with frozen savings after the firm filed bankruptcy.

With trillions of dollars potentially flowing into private markets as restrictions on mom-and-pop investors are relaxed, Linqto finds itself at the center of a debate over the safeguards for amateurs putting money in hard-to-value assets that can be difficult to sell when things go wrong.

One risk ...