Business

3 Ways To Buy Pre-IPO Stock

Pre-IPO Stock

One of the most exciting ways to own stock is to invest in potentially profitable startup companies before they become successful or offer stock to the public, which gives you the unique opportunity to make huge gains once they do.

However, the problem is finding startups you can buy into before they go public since this information is not yet readily available to common people like ordinary shares.

But as it turns out, there are at least 3-ways you can find out about and buy pre-IPO stock, including:

Become an Angel Investor or Venture Capitalist

One way to buy pre-IPO stock is to become an angel investor or venture capitalist in the early stages of the new company.

This way, you will have insider knowledge concerning their plans to offer IPO stock as well as the opportunity to be the first to purchase it at a lower price, so you stand to reap higher gains from your investment once the stock goes public.

You can sign up for email alerts to automatically receive news when a new company is in need of investors and then get in touch with them to see if they plan to offer pre-IPO stock.

Startup pitch events and competitions are also great places to find promising startups to invest in. It also gives you the chance to meet other experienced investors and insiders in the IPO industry that can help keep you in the know regarding future pre-IPO stock issuances.

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Some investors also reach out to accounting firms and financial institutions to find out about new companies in the process of issuing pre-IPO shares.

You can also register with a crowdfunding platform to invest in startup businesses.

Use an IPO Broker/Financial Advisor

Select brokers also represent startups, so they have access to pre-IPO stocks that they are willing to sell on the company’s behalf.

Likewise, some financial advisors also acquire pre-IPO stock from their clients, which they allow investors to purchase.

Hence, you can also contact a broker or financial advisor that specializes in new stock offerings to find out about pre-IPO sales.

Buy Pre-IPO Stock Funds

Some publicly held venture capitalist firms also enable investors to purchase pre-IPO shares via companies that maintain a portfolio of such stocks, provided you meet certain selection criteria.

It is also possible to buy pre-IPO shares via private equity exchange-traded funds that purchase collections of private equity shares using pooled investor money.

This way, you can also decrease your risk by investing in a diversified range of pre-IPOs.

So when the question is how to buy pre-IPO stock, you now know that you have various options to explore.. 

Investors also set up an IPO investing account to have all-out access to privately traded equities, and many enable you to participate with no account minimum.

Some platforms, such as the SoFi Invest platform, also provide you with information on everything you need to know about IPOs to help increase your chance of success.

Author : Albert