As the investment landscape evolves, more and more high-net-worth individuals (HNWIs)are exploring pre-IPO investing.

This unique form of investment allows individuals to purchase shares in private companies before they go public. While traditionally reserved for institutions and large investors, the doors to pre-IPO opportunities are now opening to qualified individuals.

As with any investment vehicle, pre-IPOs come with their benefits, risks, and key considerations. In this guide, we’ll help you understand what pre-IPO investing entails, how you can access these opportunities, and the potential rewards (and pitfalls).

What is Pre-IPO Investing?

Pre-IPO investing involves purchasing shares in a company before it lists on a public exchange like the NYSE or NASDAQ. The goal for investors is to purchase pre-IPO shares at a lower valuation than when the company eventually goes public.

Companies that typically offer pre-IPO shares are in the later stages of their growth cycle,often having already raised significant capital through Series A, B, and C funding rounds. These rapidly growing, momentum-driven companies are typically gearing up to go public but are still privately held.

Unlike public markets, where shares are bought and sold freely, pre-IPO investments occur on private secondary markets. This means that pre-IPO shares are usually sold by existing shareholders, such as early investors or employees, rather than by the company itself.

Examples of Successful Pre-IPOs

HUDSONPOINT capital has participated in some of the top pre-IPO companies in recent memory. Some of our most notable wins over the past few decades include well-known success stories like Airbnb, Uber, and Facebook, as well as more recent IPOs like Zoom and Snowflake.

To learn more about the biggest pre-IPO success stories in history, check out our list of the 9 most successful pre-IPO companies of all time.

Airbnb (ABNB)

When Airbnb went public in December 2020, it offered shares at an initial price of $68 per share. This was a big jump from itspre-IPO valuation when private investors could buy in at around $30 per share during its final private funding round.

ABNB soared on its first day of trading, closing at $144.71—over 100% higher than its IPO debut price. The stock hit its all-time high in early 2021 at nearly $220 per share—a staggering return for early pre-IPO investors.

Uber (UBER)

Uber, one of the most highly anticipated IPOs of 2019, debuted with an IPO price of $45 per share. Pre-IPO investors had purchased shares in Uber’s private rounds at various valuations, with some buying at prices as low as $10 per share.

After its IPO,UBER initially saw a sharp drop and remained below its debut price for several months. However, long-term pre-IPO investors who held their positions have benefited from periodic gains as the company diversifies its business model beyond ride-sharing. UBER hit its all-time intraday high of nearly $94 per share in early 2025.

Facebook (META)

One of the most iconic examples of pre-IPO investing is Facebook (now Meta). Facebook’s IPO share price (back then, the ticker was FB) was around $38 per share in 2012. FB shares struggled briefly, but eventually surged, and those who bought in early at private valuations enjoyed an incredible return.

FB (now META)reached an all-time intraday high of nearly $742 per share in early 2025,returning 19.5x to IPO investors. Facebook’s long-term success showcases the tremendous, eye-popping value created for those who believed in the private company’s early vision.

Zoom Video Comms. (ZM)

Zoom's IPO in 2019 was another rags-to-riches story. The company debuted at $155 per share before ZM jumped to an intraday high of nearly $320 on the same day.

For pre-IPO investors who purchased ZM in private rounds, the eventual returns were far greater. By October 2020, ZM hit its all-time high of around $590 per share,driven by soaring demand for video chat solutions during the COVID-19 pandemic.

Snowflake (SNOW)

Another standout is Snowflake, a data warehousing company that went public in September 2020. Snowflake’s IPO set a new record for the biggest software IPO in history,with SNOW priced at $120 per share.

Pre-IPO investors had the opportunity to purchase shares at $90 per share or less, and saw substantial gains when the stock surged to $318 per share in its debut—a 163% same-day jump from the offering price. By 2021, SNOW had hit an all-time high of nearly $430.

The Benefits of Pre-IPO Investing

Pre-IPO investing presents a range of compelling advantages for those willing to take on the associated risks. From high growth potential to the chance to invest at preferential pricing, here are some key reasons why many investors look out for new pre-IPO opportunities:

High Growth Potential

One of the primary reasons investors flock to pre-IPO investing is the potential for high returns. Investing in companies before they hit the public markets offers the chance to get in on the ground floor of businesses that may experience exponential growth once they become publicly traded.

Consider super successful unicorn startups like Facebook, Uber, and Airbnb—investors who got in early saw their investments multiply dramatically when these companies went public.

Preferential Pricing

Pre-IPO shares are often priced at a discount compared to their future market value once the company goes public. This allows investors to purchase shares at lower valuations before they appreciate in the open market.

Although these investments come with higher risk, the potential for outsized returns is a key draw for those willing to invest in companies at more vulnerable (and rewarding) stages.

Alternative Diversification

Adding pre-IPO investments to your portfolio offers diversification, one of the key principles of sound investing. Unlike stocks and bonds, pre-IPO investments often behave independently of public market fluctuations, making them an uncorrelated asset class that can reduce your overall portfolio volatility.

By diversifying into pre-IPO companies, you’re spreading risk across a range of assets, which can help balance out potential losses from other investments.

The Risks of Pre-IPO Investing

While the potential rewards of pre-IPO investing are compelling, it’s important to also consider the risks involved.

Lack of Liquidity

One of the most significant risks of pre-IPO investments is a lack of liquidity. Shares of private companies cannot be sold freely like public stocks, and investors may have to wait—sometimes for up to 5 to 7 years—before the company goes public or is acquired. This means your investment may be tied up for a long time.

Higher Risk of Failure

The very nature of early-stage companies means they face a higher risk of failure. Even if a company is promising, there’s no guarantee it will successfully go public. Many pre-IPO companies face challenges that may prevent them from listing on the stock exchange, including regulatory hurdles, lack of funding, or market shifts.

Limited Information

Unlike public companies, which are legally required to disclose financial and operational data, private companies have a lot more regulatory wiggle room. This lack of transparency makes it hard to assess a private company’s future growth prospects. As a pre-IPO investor, you'll have to rely on limited financials and projections that may not tell the whole story.

Market and Economic Risks

Macro and even microeconomic conditions, including market downturns or sector-specific regulatory changes, can dramatically impact a pre-IPO company’s ability to go public. The success of an IPO is often tied to broader market and sector conditions, so any significant shifts or unexpected headlines can impact your investment.

How to Invest in Pre-IPO Companies

If you’re still interested in pre-IPO investing, there are a few key steps you will haveto take to get started:

1. Become an Accredited Investor

The SEC requires that investors meet certain criteria to qualify as accredited investors before participating in pre-IPO investing. To be considered accredited, you must meet one of the following:

●    Net worth of over $1 million(excluding your primary residence), or

●    Annual income exceeding$200,000 for singles and $300,000 for couples over the last two years. You also expect to earn the same or more in the current year.

Once accredited, you will gain access to platforms that facilitate investments in pre-IPO companies.

2. Choose an Investment Platform

Platforms like EquityZen and SharesPost democratized access to pre-IPO investing, once reserved for venture capital firms and institutional investors. They connect accredited investors to promising private companies, providing curated investment opportunities.

HUDSONPOINT capital also offers qualified investors access to exclusive pre-IPO opportunities. With our deep understanding of and relationships within the sector, we help ensure our investors are always making informed decisions.

3. Conduct Proper Due Diligence

It’s truly incredible how little due diligence is done, even at the highest level (e.g.,Softbank and WeWork). But crossing your t’s and dotting your i’s is essential before investing in any pre-IPO opportunity.

As a private in vestor, you will often be your own auditor. Fortunately, at HUDSONPOINT capital, we assist our investors with detailed reports and analyses on pre-IPO opportunities to support more confident and informed decision-making.

Evaluating Pre-IPO Companies

When evaluating a pre-IPO company,consider focusing on specific key metrics that can help you more accurately determine its long-term potential:

●    Growth Potential: Consider whether the company has a scalable business model with a clear path to sustainable growth. Look at industry trends. What have other companies in the space done well, and why?

●    Financial Health: Assess the company’s revenues, profitability, and cash flow. Strong financials indicate a well-managed business that is prepared to handle the challenges of scaling. Are there any red flags analysts have already noted?

●    Market/Sector Trends: Identify whether the company operates in a sector that is poised for growth (e.g., tech,biotech, green energy). Zooming out, what does the bigger picture look like?

●    Competitive Landscape: Analyze the company’s position relative to competitors and its unique value proposition. Does the company have disruptive innovations or a competitive edge that could drive adoption and success?

These metrics should give you valuable insights into the company’s financial health, growth prospects, and overall resilience as it scales and transitions into the public eye.

What Happens After a Company Goes Public?

The IPO process typically begins when a company files a registration statement with the SEC, which includes detailed financials, business operations, and how the funds raised will be used.

The company and its underwriters will then determine the IPO share price range and run a roadshow to generate interest among institutional investors, analysts, and the general public. This may include private presentations and meetings designed to drum up excitement,alongside press releases and news coverage for public consumption.

Once the company finally lists its shares on a public exchange, the stock is available to just about anyone. However, early pre-IPO investors are often subject to a standard lock-up period—anywhere from 90 to 180 days—during which they cannot sell their shares. This lock-up period is meant to prevent share dumping during the IPO, and helps stabilize the price after the company’s public debut.

When the lock-up period ends, pre-IPO investors can sell their shares, but it’s important to closely monitor post-IPO conditions. Investor sentiment, market trends, and any headlines related to the company’s performance or management can cause price volatility.

Be The Early Bird and Get The Worm

Pre-IPO investing offers a unique chance to get involved in the early stages of a company's growth, with the potential for substantial returns. However, it’s important to be aware of the associated risks, such as limited liquidity, higher failure rates, and the lack of transparency in some private companies.

By working closely with a trusted financial advisor and conducting thorough research, you can more confidently navigate these challenges and position yourself to capitalize on the many rewarding opportunities pre-IPO investing can offer.

At HUDSONPOINT capital, we provide analternative investing platform for qualified investors to access exclusive pre-IPO opportunities. Our expert team conducts thorough due diligence on each opportunity, ensuring our clients make well-informed decisions.

If you’re ready to explore how pre-IPO investing can enhance your portfolio, schedule a consultation with one of our financial specialists today. We offer tailored solutions that align with every investor’s financial goals and risk tolerance.

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