Beginners Guide to Pre-IPO Investing

Beginners Guide to Pre-IPO Investing

Welcome to EquityZen, the leading marketplace for pre-IPO investing. As companies decide to stay private longer, investing in high-growth firms before they go public is more appealing. EquityZen's platform opens access to investments in leading private companies with investment minimums as low as $5,000 through our funds.

Investing in private companies lets you join the growth of new businesses in industries like AI, cybersecurity, and fintech, while not without risk. Through EquityZen, you can do this before a company goes public with an initial public offering (IPO).¹ More individual investors, like institutional investors, are seeing that pre-IPO investments are a key part of growth equity. They play an important role in a well-diversified portfolio.²

How to Invest Pre-IPO

Buying pre-IPO stock can offer significant upside potential, as private companies often experience substantial growth before going public. However, private company stock also comes with unique risks. Some of these risks include limited liquidity and less publicly available information compared to public stocks. EquityZen has partnered with Yahoo Finance to increase the information available on privately held companies to all investors. 

To support you on this journey, we've compiled a selection of helpful articles from our blog:

• What is Pre-IPO Investing?
   Your guide to understanding the pre-IPO secondary market and how investors can participate.
• The Pros and Cons of Pre-IPO Investing
   A look at the benefits and risks associated with investing in companies before they go public.
• What to Look for in a Pre-IPO Investment Platform
   Guidance on evaluating different pre-IPO investment platforms to choose one that best meets your individual needs.
• Getting Started with Private Market Investing: Part I - Investments page + Indicating interest
   An overview of EquityZen's Investments page and how to indicate interest in a specific private company.
• Getting Started with Private Market Investing: Part II - EquityZen’s Investment Products
   A detailed overview of the different investment products offered by EquityZen, each tailored to different investor needs.
• EquityZen's Due Diligence Process for Private Companies: A Comprehensive Guide
   An in-depth look at how EquityZen conducts due diligence on private companies.

Beyond our blog, there are even more resources available to investors on EquityZen’s platform. 

EquityZen’s  Private Market Map³ provides accredited investors a visual representation of 100 top private companies, organized by estimated market capitalization and industry. Here you can delve into specific industries, compare companies, and gain insights. Investors use this data to identify market leaders and observe trending industries. 

EquityZen’s company pages are home to in-depth information about specific private companies. Simply search for a private company on the navigation bar to find the specific company page. Accredited investors can access information including:

• Capitalization table ("cap table") analysis
• Reference pricing and valuation data
• Recent news
• Business updates
• Available investment opportunities

Looking for more information?

You can find hundreds of articles in our Help Center that address frequently asked questions from investors like you. We encourage you to explore these resources to deepen your understanding of the private market and private equity investing.

Our team is here to help you at every step. We provide the information and support you need to make confident investment choices. Have a question but don’t see the answer? Reach out to support@equityzen.com, and someone from our team will get in touch to help.

Footnotes

1. Not all pre-IPO companies will go public or be acquired, and not all IPOs or acquisitions are or will become successful investments. There are inherent risks in pre-IPO investments, including the risk of loss of the entire investment, illiquidity, and fluctuations in value and returns. Investors must be able to afford the loss of their entire investment.

2. Diversification does not assure a profit or protect against market loss.

3. The information in the Private Market Map is intended for reference only and does not constitute a recommendation or personal financial advice. Use of this information is at the user's discretion and risk.