Is There A Way To Buy Into A Company Before It Goes Public(Initial Public Offering-IPO)?

I would like to find out if it is at all possible to be able to buy into a company before it puts it's Initial Public Offering on the stock market. I've heard from some other people that you can buy shares before it goes public. Is this true or false? If it is true how do you go about doing so?

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  • 9 years ago
    Favorite Answer

    Unless you are an officer, a current owner of the firm or you have a working professional relationship with the firm you can not buy into a firm, especially if it is in the process of going public.

    Not all firms that go public are traded on a Stock Exchange, most trade over-the-counter.

    Source(s): from the street
  • Anonymous
    9 years ago

    Yes, but...

    As a rule it takes serious money and an invitation (connections).

    In theory it is possible through a handful of exchanges that have popped up to trade illiquid and private shares. The problem is that this isn't practical in most cases for the small investor because the folks selling aren't interested in selling thousands of dollars at a time. They might be willing to sell hundreds of thousands at a time, but millions is probably the more common goal. Illiquid shares also may be limited in who is allowed to buy them.

    I would expect the marketplace to open up to the small investor eventually as it has with "when issued" shares...but not right now.

  • 9 years ago

    I asked exactly the same question few days ago to my stock brokerage firm regarding buying Zynga shares, and the officer said that you can do that only from the secondary market.

    But when i tried to do that, the minimum amount to buy shares was around $250,000..

    I forgot the website, but i think if you try to google "secondary market shares", you may find some online brokerage firms that can sell you shares of private companies such as twitter and facebook..

    Source(s): Investor
  • 9 years ago

    Not in your dream. If you are the company officer, you don't need to buy in the IPO. The IPO price is for the underwriters, not for the general public. You have to be extremely, extremely lucky if you could buy on the first day at a price when it is on it's 1/2 way up.

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  • JoeyV
    Lv 7
    9 years ago

    Of course, but you probably need big money.

    The most straightforward is private equity. Many companies have private equity investments prior to going public. That's what venture capital firms and private equity firms do for a living.

    Then there are firms like SecondMarket that buy stock from employees and sell it to investors. To buy such shares you need to be an accredited investor (i.e., make $200K or better) and they usually sell equity in big chunks like $2M each. Here's a link: http://www.businessinsider.com/heres-how-you-buy-f...

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