Investor Education
What is a
pre-IPO investment?
A plain-language guide for investors evaluating private-company allocations before a potential public listing.
Definition
A pre-IPO investment is an allocation into a privately-held company at a stage where a public listing is credibly on the horizon but has not yet occurred. Ownership is typically obtained through a primary raise, a directed secondary sale, or a structured vehicle.
Who invests
Access is generally restricted to accredited or eligible investors under the securities laws of the investor's jurisdiction. In Canada, this often relies on exemptions such as accredited investor status. Suitability is assessed on a case-by-case basis.
How pricing works
Pre-IPO investments are typically priced with reference to the company's most recent primary round or observed secondary transactions, often at a discount that reflects illiquidity, timing uncertainty and the lack of public price discovery.
What to expect
Positions are illiquid until a liquidity event — an IPO, acquisition or secondary sale — occurs. Not all pre-IPO companies proceed to a listing. Timelines routinely extend, and outcomes range from partial to total loss of capital, through to significant gains.
Key risks
Capital loss, extended illiquidity, valuation opacity, dilution in subsequent rounds, regulatory changes, and IPO cancellation or delay. Investors should read our Risk Disclosure and obtain independent professional advice.