With the rapid development of technology and internet companies, pre-IPO investments have become an attractive option for investors looking for higher returns. Pre-IPO refers to the stage when a private company starts preparing for an initial public offering (IPO). By investing in companies at the pre-IPO stage, investors can potentially achieve outsized returns before the company goes public. However, pre-IPO investments are also riskier and less liquid. In this article, we will provide an overview of major pre-IPO investment platforms and opportunities.
EquityZen – Platform for Pre-IPO Tech Company Investments
EquityZen is one of the largest investment platforms focused on pre-IPO tech companies. They provide accredited investors access to invest in late-stage, pre-IPO tech firms like SpaceX, Robinhood, and Instacart. EquityZen partners with employees and early investors to unlock the value of their shares without having to wait for the IPO. The minimum investment amount is $10,000. EquityZen conducts extensive due diligence on each company and only accepts 1-2% of companies that apply to be listed on their platform. The platform focuses on late-stage tech unicorns with high growth trajectories.
Forge Global – Marketplace for Pre-IPO Share Trading
Forge Global operates a marketplace that allows private companies and investors to trade pre-IPO stock. It offers shares in companies like Airbnb, Juul, and Palantir before they go public. Accredited investors can browse and bid on available shares using the platform. Forge Global partners with broker-dealers, private companies, and investors to provide the pre-IPO share liquidity. The minimum investment is usually between $50,000 to $200,000. Forge Global also provides tools for investors to manage and track their pre-IPO investments.
SharesPost – Investing in Late-Stage Private Growth Companies
SharesPost is a leading provider of private capital markets solutions for late-stage companies and investors. Its trading platform and managed funds provide access and liquidity to invest in leading private technology and healthcare companies like SpaceX, Coinbase, and Roblox. SharesPost conducts extensive research and due diligence on each company prior to making them available on its platform. The minimum investment required is between $50,000 to $100,000. SharesPost focuses on late-stage, high growth private companies that are expected to IPO within 2-4 years.
Secondary Shares – Access to Pre-IPO Company Stock
Secondary Shares provides accredited investors with access to stock in pre-IPO tech companies that are backed by top VC funds. Its trading platform and managed funds enable investing in unicorns like Databricks, ByteDance and Stripe. Secondary Shares sources its inventory from employees, early investors and shareholders looking for liquidity. It conducts extensive diligence with each company prior to making shares available. The minimum investment is $100,000. Secondary Shares focuses exclusively on late stage, high growth companies, often with $1B+ valuations.
Pre-IPO investments provide the potential for outsized returns but also come with higher risks. Conducting due diligence and investing through reputable platforms like EquityZen, Forge Global, SharesPost and Secondary Shares can help mitigate some of the risks. Focusing on late-stage companies with high-growth trajectories can also help maximize the investment upside potential in the pre-IPO market.