![]() Have a net worth over $1M, individually with a partner.Have 2+ years of annual income exceeding $200K, or $300K with a partner - with the expectation that income will continue or grow in the current year.To be considered an accredited investor by the SEC, a person must meet any one of these requirements: In order to purchase an unregistered security, a person must be what’s considered an accredited investor. In the U.S., private company stock is typically considered an unregistered security by the Securities and Exchange Commission (SEC). Sound like you? Then let’s quickly make sure you meet the requirements for investing in pre-IPO shares before we start exploring the tools that will help you do so.Ī Note on Accredited Investors in the U.S. This means more shareholders than ever before are sitting on long-term illiquid assets that they may be looking to offload for assets with more liquidity - such as cash.Īnd that makes it an inventor’s market for those who are willing to dive into pre-IPO shares. In addition, as a general trend, private companies are also staying private for longer than they used to. Issuers that want top dollar for their shares often choose to hold off on going public until markets improve. This is due to ongoing market downturns, which decrease the valuation companies are able to get. It all goes back to the pre-recession indicators we’re currently seeing.įrom May 2021 to May 2022, there was an 80% decrease in companies going public. So, considering that the concept of IPOs and shares both pre- and post-IPO have been around for centuries - why is now such an ideal time to start considering this investment strategy more closely? Research indicates that the first IPO as we know it took place in 1602, when the Dutch East India Company sold bonds and shares to the public in order to raise money for operations. They exist on what’s called the “private market.” Why is Now the Time to Consider Pre-IPO Shares? Pre-IPO shares are a type of early-stage investment that help balance out the more prevalent late-stage investment opportunities. These shares are issued by the company and are not available for purchase on the public stock exchange, because the company hasn’t gone public. ![]() When we talk about pre-IPO shares, we’re talking about equity compensation in the form of private company shares that are held by employees and investors. IPO stands for “initial public offering.” When a company “IPOs” or “goes public,” it makes its shares purchasable to public investors.
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