8 Best Pre-IPO Investing Platforms (Exclusive Opportunities)

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Investing in companies before they go public is one of the ways investors like Piter Thiel built their wealth. I’m sure you know this. Sure, Piter’s returns are not typical and are extremely challenging to achieve by the vast majority of other investors.

But, is an option for investing in Pre-IPO companies available for a wider circle of people? Thanks to the new wave of fintech companies, it is.

Here are the three best Pre-IPO investment platforms I have chosen for different types of investors:

• Best Pre-IPO platform for High-Net-Worth Individuals – EquityZen. The platform allows investing in over 400 private companies with a combined market capitalization of $1.5 trillion. The minimum investment is $10,000. Fees are from 3% to 5%.
• Best Pre-IPO Platform With Low Investment Minimum – Dizraptor. The platform is an emerging pre-IPO investing app that enables high-net-worth individuals to invest in companies like OpenAI or The Boring Company with a low minimum of $1,000.
• Best Pre-IPO Platform for Non-Accredited Investors – Titan. The platform is a fintech app that offers to build a customized investment portfolio that includes exposure to private companies. The minimum investment is low – $500, and fees range from 0.7% to 0.9%.

For most of the pre-IPO investing platforms, investors must meet certain requirements and be accredited.

An accredited investor is an individual or entity that meets certain financial criteria set by the Securities and Exchange Commission in the United States.

A bare minimum to become an accredited investor is to have a net worth of at least $1 million and an annual income of at least $200,000. These criteria are intended to identify individuals who are financially sophisticated and can bear the economic risk of investing in Pre-IPO companies.

Usually, it is possible to be verified as an accredited investor on the Pre-IPO platform of your choice.

Best Pre-IPO Investing Platforms

Pre-IPO investing is challenging, and it is even more difficult to find the right platforms and brokers for putting up your money.

I have found pre-IPO investing to be very challenging and demanding. However, I believe anyone can become a successful investor with proper guidance and research.

Here are the top seven best pre-IPO investing platforms right now.

1. Forge Global

• Accredited Investor Requirement
• Minimum transaction size: $100,000

Forge Global is one of the biggest private investment marketplaces in the world. It provides an expansive dataset and connects companies with investors across the globe.

The marketplace allows small investors to invest capital in early startups and late-stage companies pushing toward IPOs. Users can buy or sell their shares in these private companies online easily. It provides real-time pricing of the financials of the companies, so users have an idea about the valuation of the share price of the startup.

Forge Global has more than 500 companies traded on its platform and around $12 billion in trading volume. The company is also listed on the NYSE and includes several major names in its portfolio, including:

• OpenAI
• Anduril
• Neuralink
• Upside Foods
• Helion Energy
• TAE Technologies

Forge charges a fee of around 5% of each investment. The percentage can be higher if the investment is less than the minimum transaction amount of $100,000.

2. NASDAQ Private Market

• Accredited Investor Requirement
• Minimum transaction size: Vary depending on the specific company and the terms of the offering

NPM is one of the biggest private equity and pre-IPO investment platforms.

The NASDAQ private market has over 600 companies trading in its portfolio with more than $43 billion in transaction value. NPM is limited to accredited investors and qualified purchasers, according to the Securities and Exchange Commission.

Investors can easily open an account online via their website and explore the huge list of private companies along with their fundamentals and technical. Users can also trade their portfolios according to their requirements.

NASDAQ has more strict listing requirements than other such marketplaces. These restrictions allow NASDAQ’s private market to streamline its operations and select only the best possible startups for their pre-IPOs.

3. EquityZen

• Accredited Investor Requirement
• Minimum transaction size: $10,000 for new investors

EquityZen is one of the leading secondary share markets globally. The platform facilitates transactions between startups and investors, allowing the former to raise capital and the latter to invest in a potential unicorn.

EquityZen has more than 400 companies trading in its portfolio with an estimated combined market capitalization of $1.5 trillion. The company usually sources shares from early investors or employees eyeing liquidity.

Only companies with proven track records are listed on EquityZen. It provides investors with price history, valuation analysis, and risk mitigation services. Some of the companies listed on EquityZen are:

• Creditas
• June Homes
• Uniswap
• Blue Origin
• Stripe
• The Boring Company
• TikTok
• Neuralink

Like NASDAQ private market, EquityZen has strict requirements for investors. Only accredited investors or high-net-worth individuals can trade over the platform. Once the investor shows interest, EquityZen informs the company and asks for approval. Once approved, the shares are transferred to the investor’s portfolio.

The minimum investment required for a single EquityZen investment is $10,000 for first-time investors and investors with five or more investments. There are also investment charges, ranging from 3% to 5%.

4. Equitybee

• Accredited Investor Requirement
• Minimum Transaction Size: $10,000 per investment

EquityBee Pre-IPO investment platform is restricted to accredited investors and offers options to invest in high-growth startups. The company aims to tap into the inaccessible private sector and provide its investors with investment opportunities in leading VC-backed companies.

Users can easily sign up via their website, confirm their accredited investor status, and access hundreds of potential unicorns. The company works by accepting funding requests from startup employees and presenting these requests to investors to choose from.

The investors must pay a 5% fee to Equitybee at each investment. The minimum investment amount with the platform is $10,000 per investment.

5. Titan

• Accredited Investor Status is not required
• Minimum investment: $500

Titan isn’t a typical Pre-IPO investment platform like others on our list. It is a fintech product that offers to build a customized investment portfolio, where one of the types of securities is a private companies. That’s why the platform does not require its investors to be accredited, making it accessible for retail investors with low investments.

The minimum investment amount at Titan is $500, and fees range from 0.7% to 0.9%. Users can easily create an account via their website and get started once the account is approved.

One of my friends is an avid investor on the platform and feels that the investments are worthwhile apart from the limited number of companies on the platform.

Users can choose active or passive investments depending on their requirements. I suggest budding investors choose passive investments instead of sitting in the front seat of their portfolio. Learn and then apply, not the other way around.

One of the downsides of Titan is that the investors cannot directly invest in startups, and they can only take part in the ARK venture capital fund with an investment horizon of 5-10 years.

However, the fund can be liquidated quarterly, so investors can withdraw their investments whenever they want.

6. Linqto

• Accredited Investor Requirement
• Minimum investment size: $100,000

Linqto charges within the offer rate, so investors do not have to pay additional fees. The platform charges no carried interest, brokerage, or exit fees, making it an excellent choice for investors.

The same as for other Pre-IPO platforms, only accredited investors are able to invest with Linqto. The minimum investment requirement for the marketplace is $100,000, and users can easily place their orders via the company’s website.

Some of the companies listed in Linqto’s portfolio are:

• Ripple
• Alchemy
• Polysign
• Epic Games
• Motive
• Zipline
• Bitpay
• HoneyBook

Investors can select the startup they want to invest in and check its fundamentals. The Linqto team will contact the investor for the next steps.

Once the startup goes public, the shares can be transferred to the investor’s brokerage account.

7. Wefunder

Wefunder is a crowdfunding marketplace, so technically not a Pre-IPO investing platform, that allows small investors to invest in early stage startups.

The minimum investment amount with Wefunder is $100, and the platform charges a 2% fee on the transaction amount or a maximum of $100.

Some of the companies listed with Wefunder are:

• Here
• Outsite
• RAD AI
• Hevo
• EquityMultiple
• Sensate

Special Mention: Dizraptor

• Accredited Investor Requirement
• Minimum investment: $1,000

Dizraptor is an emerging pre-IPO investing platform that allows users to invest in some of the biggest unicorns in the market, such as OpenAI and The Boring Company.

High-net-worth individuals who are eligible to become accredited investors can download the app and start investing in the most prominent startups.

One of the biggest success stories on Dizraptor is a cloud hosting company DigitalOcean which generated 378% net profit for its investors in 2021.

What Is Pre-IPO Investing?

Pre-IPO investing involves putting capital in private companies trying to go public soon. This type of investing is riskier compared to public companies but offers high rewards in exchange.

Startups do not become multinational solely based on initial investments. They require multiple funding sources, the final being the Initial Public Offering (IPO). However, before an IPO, there are several rounds of funding, such as:

• Pre-Seed
• Seed
• Series A
• Series B
• Series C
• Pre-IPO

While the rest are common, pre-IPO has recently become a buzzword. It involves the sale of large chunks of a private company’s shares before it is listed on a stock exchange.

This investment opportunity was historically restricted to institutional investors, hedge funds, and private equity firms.

Thankfully, with recent developments, retail investors (the general public) can now start investing in companies prior to their listing giving small investors like myself a significant advantage.

What are the Requirements to Become an Accredited Investor?

In the United States, the Securities and Exchange Commission has set specific criteria for individuals to qualify as accredited investors. These criteria are intended to identify investors who are financially sophisticated and can bear the economic risk of investing in Pre-IPO companies and other securities.

The requirements to become an accredited investor are:

1. Financial net worth: An individual must have a net worth of at least $1 million (excluding their residence), either individually or jointly with their spouse.
2. Income: An individual must have had an income of at least $200,000 in each of the two most recent years or a joint income of at least $300,000 with their spouse and have a reasonable expectation of reaching the same income level in the current year.
3. Trust: Certain entities, such as trusts, can qualify as accredited investors if their assets are at least $5 million.

Keep in mind that these are the general requirements. However, regulations may change, and it’s always best to check with the SEC for the most up-to-date information.

How to Become an Accredited Investor

Here are the steps to becoming an accredited investor:

1. Determine Your Net Worth Without a Primary Residence

To qualify as an accredited investor, an individual must have a net worth of at least $1 million, either individually or jointly with their spouse. This net worth must not include the value of the individual’s primary residence.

2. Review Your Income

An individual must have had an income of at least $200,000 in each of the two most recent years or a joint income of at least $300,000 with their spouse and have a reasonable expectation of reaching the same income level in the current year.

3. Provide Documentation

Provide the required documentation to the SEC and/or the financial institution where you are investing that verifies your net worth and income, such as tax returns, bank statements, and other financial documents.

Keep up to date with the SEC regulations and guidelines as they can change over time.

Risks of Pre-IPO Investing

Liquidity and capital loss due to bad investments are some of the top reasons pre-IPO investing is risky. Users can also get huge losses if the price tanks after the IPO.

Buying a company’s pre-IPO stock gives the investor a significant advantage in the price as they receive the shares at a discounted rate compared to the post-IPO possible price. However, since the reward for this type of investment is extremely high, the risk associated with it is directly proportional to it.

Here are some of the biggest risks with pre-IPO investing that I believe every investor should be aware of:

• Dilution due to more investments
• Capital loss due to company bankruptcy
• Illiquid shares
• Little to no dividends in the short run
• Price reduction post-IPO

Why do Companies Offer Pre-IPO Stocks?

The reason why young private companies opt for a pre-IPO is to attract capita earlier.

IPOs are not highly predictable, and a lot depends on the demand for the stock. If the IPO ends up undersubscribed or unsuccessful, the company will be unable to raise the required capital.

To offset this risk, startups go through a pre-IPO round to raise capital by offering their shares at a discounted rate to attract investors.

The Bottom Line

Thanks to the Fintech Companies, Individuals can now participate in Pre-IPO investments previously limited to large hedge funds and private equity firms.

Some platforms allow small investments in budding startups, but most require their customers to be verified as accredited investors.

Those who have the drive to bet and take higher risks can make abnormal returns with a few successful investments in these late-stage fundings.