Investing in that hot start-up with the well-publicized IPO can often be a recipe for disappointment. Sky-high valuations and anti-shareholder structures can make even the fastest-growing company a bad bet. Still, there are a few private start-ups out there today that, if public, would be too hard to resist. These are companies that transcend their "start-up" labeling and are fundamentally strong businesses with sustainable competitive advantages, strong cash generation, and sound management. You won't find a mobile-gaming play, or even a 3D printer stock among them, but there's no denying these companies are redefining (or creating) their respective industries.

Perfect vision
A few hundred dollars for frames and two lenses might make sense if you just had to represent a French or Italian fashion brand, but it seems a little rich to have been the industry norm. Yet, for years, that's what the eyeglass industry was ... until Warby Parker stepped up.

Warby is the hottest name in eyewear, but you won't find the glasses next to Prada and Gucci-branded ones in a department store. You certainly won't pay as much. With a flat rate of $95 for most of its prescription eyewear (sunglasses are a little more), cutting-edge design, and a seamless customer experience, Warby Parker cleared the fog over its archaic industry. Starting with an online-only sales platform, the company delivers high-quality, fashion-centric eyewear at a fraction of its competitors' prices due to zero licensing fees and direct distribution. It has since expanded into physical retail locations around the globe, mainly so that shoppers can more easily try on their favorite pairs.

Warby Parker financials are well-guarded at this point, but the company recently completed a Series C round  of $60 million. At scale, Warby Parker is a very difficult company to mimic and through fantastic marketing has set itself far apart from every other player in the space. Its low-cost business model might not have the fat margins of some peers, but its extremely affordable products are creating enough sales volume to more than make up for it.

Drop it like it's hot
The cloud storage industry is already an incredibly crowded space, and many of the public players are trading at unreasonable valuations with little in the way of a business moat. One of the most important players, Dropbox, is yet to go public. The company has raised nearly half a billion dollars and is rumored to have annual sales around the same figure.

Dropbox's foot-in-the-door product is 2 GB of free cloud storage for consumers. It's a small amount, but so easy to use that many have upgraded past the free level. On a business level, the numbers are astounding: 97 % of Fortune 500 companies are using Dropbox in some capacity, and as of November of last year, the company had 4 million business accounts (consumer accounts are at 200 million). Dropbox is bridging the gap between  business and personal use to make file storage and sharing utterly seamless. More importantly, the service is considered to be very safe.

A recent $250  million raise puts the company's value at $10 billion. While it's one of the biggest players in the private start-up space and is undoubtedly richly valued with an IPO on the horizon, Dropbox's hockey-stick growth would be worth paying up for.

One to rule them all
This one needs no introduction. On-demand taxi service Uber is easily the hottest company in the start-up world. While its mobile-based taxi service was already incredibly disruptive to its native industry (taxi lobbyists have gone insane trying to limit its spread), it's the future of Uber that makes this one of the most attractive businesses since the early days of Amazon.com. Amazon started off as a bookstore. And yes, it completely destroyed the brick-and-mortar bookstore business. It then went on to change the entire retail business, irreversibly. Uber is replacing taxi companies because it's better for everybody (except the taxi industry)—drivers prefer it, consumers love it.

Uber has the potential to be the on-demand, automated delivery service of everything. Today's easy-to-use hail-a-driver system is wonderful, but the future involves fewer humans, more robots, and more uses. Uber is collecting data and increasing its scope at a frightening rate. It's creating a logistical blueprint in every city it operates (26 countries, more than 60 cities). Once Uber has everything in order, the delivery business will change forever. As CEO Travis  Kalanick said, "Once you're in the business of delivering cars in five minutes, there are a lot of things you can deliver in five minutes."

The company's financials were rumored to have leaked late last year, showing some outrageous growth figures. If the documents are accurate, Uber is tacking on around 80,000  users per week, or just under 4 million per year. It's consistently generating $20 million in sales, every week. Active clients (those consistently using the service) average nearly half a million, every week.

As of its last capital raise, Uber is worth just $3.5 billion. That would put its P/S at an estimated 3.5x, making it not only one of the most disruptive, innovative companies around, but one of the most reasonably valued. When the IPO eventually comes along, we will sadly see a much richer valuation, but this would be one time to throw the numbers out the window—Uber is a company to own.