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Buy Pre Ipo Stocks

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Buy Pre Ipo Stocks

The good news, however, is that some individuals can invest in pre-IPO stocks through secondary marketplaces like Forge. If you meet the financial requirements of being an accredited investor, then investing in companies before they go public might be easier than you assumed.

If you qualify as an accredited investor, then you might be able to buy (you would generally not be required to be an accredited investor to sell) pre-IPO stocks through a secondary marketplace like Forge.

TThe private market could be considered a separate asset class compared with publicly traded stock. So, you can potentially benefit from diversification if you buy some pre-IPO shares, rather than investing entirely in publicly traded stocks.

As with virtually all investments, investments in pre-IPO stocks carry the risk of decreasing significantly or going to zero, such that an investor not only fails to make a return on the investment, but actually loses some or all of the money originally invested.

For investors, pre-IPO shares are a golden opportunity to make huge financial gains if the price goes up. However, you should note that pre-IPO investing is sometimes offered only to high-net-worth individuals because the management wants to sell large blocks of stocks.

No one can ignore the overwhelming benefits of purchasing stocks at a steep discount. It is common for companies to offer stocks at half the initial list price. The main benefit of investing in pre-IPO shares is the opportunity to get exponential returns on your investment.

However, a higher expected demand generally leads to a higher first-day return. Also called IPO pops, the average first-day returns of the IPO are 18%. According to NASDAQ, recent years have seen a much larger return. During the heyday of tech stocks, the IPO pop of high-tech stocks was close to 60%.

Traditionally, pre-IPO stocks were only accessible to venture capital firms, institutional investors, and people with deep pockets. The technology and the surge in financial securities have leveled the playing field to a great extent. While you still need a reasonable financial background, it is still possible to find reputable companies like Urban Capital Network that allow investors to get started with minimal investment requirements.

You can buy pre-IPO shares from specialized brokers and financial advisors. These companies acquire stocks and resell them to potential buyers or they collaborate with other companies seeking investors.

Pre-IPO stocks are shares that a private company sells to investors before the company goes public (before its IPO). Most companies who sell pre-IPO stock use a process called pre-IPO placement. These shares are often bought by institutional investors like hedge funds and private equity firms, along with a few retail investors.

Another way to buy pre-IPO stocks is to take on the role of an angel investor or venture capitalist yourself. If you provide early-stage financing to a startup, you can acquire stocks. If the company eventually holds an IPO, you stand to reap stellar gains. Here are some ways you can buy pre-IPO stock directly from companies.

So, why are investors cutting checks and raising funds to buy these pre-IPO stocks Simply put, it's the returns. According to private investment firm Cambridge Associates, the top 25% of investment firms in VC have annual returns from 15% to 27%.

Pre-IPO stocks are sold as private placements before the IPO is held. They are sold in large blocks of shares before the listing, so the average retail investor may not be able to buy pre-IPO stock. Private-equity firms, hedge funds and other institutional investors are usually the purchasers of these stocks. High-net-worth individuals with at least $1 million in liquid financial assets may also participate. Pre-IPO stocks can be extremely risky, as there is no guarantee that they will become successful enough to be listed.

The biggest risk is that the stock will decline in the


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