How to Invest in Pre-IPO Startups: 3 Ways to Get Access
If you’re looking to become a better investor, one strategy you may want to consider is investing in pre -IPO startups.
By buying shares from early employees who need some liquidity, you can get access to these companies before they go public. This can be a great way to get in on the ground floor of promising new businesses and see significant returns on your investment.
Table of Contents:
- FAQs in Relation to How to Invest in Pre IPO Startups
If you’re like most people, the thought of investing in a pre-IPO startup is daunting. You don’t have the connections or capital to get in on the ground floor, and even if you did – it’s a high risk investment.
But what if there was a way to invest in pre-IPO startups without all the hassle?
EquityZen is a platform that allows investors to buy shares of pre-IPO companies on the private “secondary” market. That means no hunting down contacts for the companies, no going through VCs or angel investors – you can get in early and ride the wave as these companies grow.
And because EquityZen is regulated by FINRA, your investment is at least somewhat regulated.
So how does it work?
First, sign up for an account on EquityZen’s website. Then browse through their list of available investments – they vet all of them so you know you’re getting the actual shares.
Once you’ve found one that interests you, simply submit an offer and wait for approval from the company selling their shares. These shares are from secondary markets; meaning that usually it is from early employees selling their vested common stock shares. If everything goes through, congratulations!
You’re now an investor in a hot new startup. Of course, there are risks involved with any investment – but with careful research and due diligence, investing through EquityZen can be a great way to get ahead of the curve without breaking the bank.
What is EquityBee?
EquityBee is a startup that provides early employees funding to help exercise their options for to purchase shares. The company was founded in 2016 by Alex Solomon and his co-founder, Michael Abbot.
Why should I care about EquityBee?
By providing early employees with funding to help them exercise their options, Equity Bee gives these workers a chance to buy equity in the company they’re helping to grow – which can be a great investment down the line.
Moreover, since many startups are pre-IPO (meaning they haven’t gone public yet), this could also be an opportunity to get in on the ground floor of some major companies.
So if you’re looking for ways to invest smarter and make some serious profits down the road, keep an eye on firms like EquityBee.
When it comes to investing, there are a lot of options out there. You can invest in stocks, bonds, mutual funds, and more.
But what if you want to get in on the ground floor of something big?
That’s where Forge comes in. Forge (also known as Forge Global, or formerly known as SharesPost) is an online platform that allows you to invest in pre-IPO startups.
This means that you can get in on the action with companies that are just starting out and have the potential to grow exponentially. And because these companies are not yet public, they often offer shares at a discounted price.
So why should you consider investing in pre-IPO startups?
For one thing, early investors typically see the biggest returns when a company goes public or gets acquired.
And secondly, by getting involved with a startup from the beginning, you can help shape its future and potentially reap even greater rewards down the road.
Of course, there are also risks associated with this type of investment; but if done carefully and thoughtfully, investing in pre-IPO startups can be a great way to earn impressive profits over time.
FAQs in Relation to How to Invest in Pre IPO Startups
How do you invest in startups before they go public?
Investing in Startups — The best way to invest in startups before they go public is by angel investing or venture capital. Angel investors are typically wealthy individuals who provide funding for early-stage companies in exchange for equity.
Venture capitalists are firms that pool money from various sources (e.g., pension funds, endowments, and high net worth individuals) to invest in startup companies.
Is it good to invest in pre-IPO?
It can be good to invest in pre -IPO companies, but there are also risks involved.
Some of the potential benefits include getting in on the ground floor of a promising company, being able to sell your shares for a profit once the company goes public, and receiving dividends if the company is doing well.
However, there is also the risk that the company will not do as well as expected and you will lose money.
There is also no guarantee that you will be able to sell your shares when you want to since they may not have traded on an exchange yet.
Before investing in any pre -IPO company, it is important to do your research and understand both the risks and rewards involved.
You can buy vested shares from early employees who need some liquidity, or you can work with companies that offer access to these types of investments. EquityZen and EquityBee are two platforms that allow investors to get involved in pre -IPO startups.
Forge is another company that helps connect accredited investors with high-growth startups.
If you’re looking for ways to invest in pre-ipo startups, feel free to reach out and let us know. We can help you get access to these companies by buying vested shares from early employees who need some liquidity. With our experience and expertise, we can guide you through the process and ensure that your investment is a success. So don’t delay, contact us today if you have any questions and think we might be able to help.