Back in the dot com bubble of the 1990’s, profiting from IPOs was like throwing a dart at a house, they would hit every time. For a while this caused a feeding frenzy in the markets. The trick was getting in and out quickly. Then everything changed and it became harder to make the same kind of double or triple figure returns from IPOs, in the same way. In order to invest in IPOs nowadays you need to go through a few steps.
- First you need to find the companies that are due to go public. You can do this by looking through the S-1 forms filed with the Securities and Exchange Commission (SEC)
- Then you will need to register with a brokerage firm that offers this service. The company that is about to list publically will contact the brokers in order to sell the first wave of shares.
- As an investor you may have to pass certain criteria in order to be considered by the brokerage firm, for instance you may need a certain amount of investment capital for instance $100,000.
Investing in IPOs in this fashion takes a lot of research and effort on the part of the investor. However, now a brokerage firm has come along and shifted what it means to invest in IPOs. TRADE.com which is a well-known brokerage brand among retail investors is offering a product which it simply calls IPOs. However the difference is that TRADE.com is offering listings before the companies go public.
Benefits of Late Stage Startups Rather Than Actual IPOs
That means you can get in from the ground up. This type of investing has many benefits. The fact that you are buying shares in a brand before it is listed on a stock exchange can often mean a better price for shares as at this point, the companies are late stage startups. Risk can be lower because TRADE.com only takes on board listings for high potential proven start ups, and often features big name companies like Uber and Airbnb. The fact that these are late stage startups is another reason that the risk can potentially be lower than investing seed money in unknown quantities like early stage startups.
The IPO MarketPlace
For many investing in companies once they go public just isn’t an option. Along with the high capital that this will require, many investors that subscribe for shares at this stage just won’t get them. Another reason that early participation is much better in the form of Pre-IPO listings.
If you are interested in this innovative way of investing in some of the most impressive and also well-known names in the market than one way to do that is through TRADE.com’s programme. The company suggests you talk to them first in order to register your interest. It is worth noting that as will all good things in life, allocations are limited and it is worth moving quickly if you see a name in their marketplace that particularly draws you to it.
The image below shows you some of the names currently in their portfolio. Happy investing in Pre-IPOs and thank us later.