Pre-IPO

Short version: “Pre-IPO” refers to shares of a company sold before that company
goes public (before its initial public offering). These can be primary shares (newly
issued by the company) or secondary shares (existing shareholders selling). PreIPO investing gives access to private-company growth (and risk) with the goal of profiting when the company lists on a public exchange.

Below I’ll explain how the pre-IPO process works from both the company side
and the investor side, plus key terms, timelines, benefits, and risks.

pre ipo Key terms you should know

Potential for high returns if company does well at IPO.
Earlier valuations are often lower than IPO price.
Possibility of preferential terms (board seats, protective provisions).

Risks and downsides

High risk / illiquidity — shares are often hard to sell until IPO or a
secondary event.
Valuation uncertainty — private valuations can be inflated; IPO may
price lower.
Regulatory & market risk — IPO market conditions may change (deal
can be delayed/cancelled).
Information asymmetry — private companies disclose less than
public ones