FAQ
Frequently Asked Questions
2. What is an IPO?
Covering questions we often get:
What are pre-IPO shares? What are the private markets?
Pre-IPO refers to a company's life cycle before its Initial Public Offering (IPO). During this phase, a company remains privately owned, with a relatively small number of shareholders made up of early investors like venture capitalists, angel investors, company founders, and employees.
Pre-IPO Shares:
Pre-IPO shares are equity stakes in a company held by these early investors before the company has gone public. These shares offer the potential for substantial returns if the company's IPO is successful and the stock price rises. However, they also carry significant risks, as they are relatively illiquid, and their value is tied to the company's success and its ability to go public eventually.
Private Markets:
"Private markets" refers to the marketplace for trading equity stakes in private companies. These markets function differently than public markets. For one, they're generally less liquid than public markets, meaning shares can't be bought and sold as easily. Additionally, regulatory requirements and financial disclosures in private markets aren't as stringent as in public markets, making investments in private markets riskier.
However, private markets offer the opportunity to invest in potentially high-growth companies before they go public. This can attract investors willing to accept the higher risk in exchange for the potential for significant returns. Investing in the private markets usually requires meeting certain criteria, including having accredited investor status.
In recent years, the development of platforms like ours has made access to pre-IPO shares and the private markets more broadly available, allowing qualified investors to participate in these opportunities more easily. However, investing in pre-IPO shares and private markets should be done carefully, as these investments can carry significant risks. As always, potential investors should conduct thorough due diligence and seek advice from financial advisors.
IPO CLUB does not provide financial advice and is always contacted by willing investors who seek to join the club unsolicited.