Top 10 Strategies for Investing in Pre-IPO Stocks

Getting in before a company goes public used to be nearly impossible unless you had deep connections or serious money. In recent years, though, that began to shift as early access stopped being reserved for the few.

More investors now have tools and platforms that let them participate earlier, and when the right company hits, the upside can be huge.

What Pre-IPO Stocks Actually Are

Before a company lands on a stock exchange, there’s an entire phase where ownership is private and shares are held by founders, early employees, and institutional backers. This phase used to be brief, but with private capital flowing in, companies are now staying off the public radar for years, often hitting billion-dollar valuations without ever touching Wall Street.

IPOs were once about raising money to scale; today, they’re often just a chance for early investors to cash out.

Tapping Into What’s Next Before It Hits Big

Beyond traditional startups, early-stage crypto projects are emerging as another way to get ahead of the market. These presale phases offer access before a token reaches any major exchange—an advantage that can shift the return profile entirely.

This crypto presale list tracks projects gaining traction during this stage, with Solaxy already raising over $33 million from early backers. It’s a clear sign of how this space is expanding beyond just hype, attracting serious capital long before a public listing.

Secondary Markets Took Off in 2024

In 2024, a big shift happened in the world of private investing. The secondary market—where people buy and sell shares of private companies—reached a record $160 billion in deal volume.

That’s more than any previous year, even higher than the boom in 2021.

The market grew rapidly because large investors, such as pension funds and venture capital firms, needed more flexible exit options, while increased buyer activity and a narrowing price gap between bids and asks made transactions easier to complete.

On top of that, people are more comfortable than ever with the idea of buying into private companies, even if they’re not publicly traded yet.

Revolut Showed How Big These Deals Can Be

One of the biggest examples was Revolut. The fintech company saw almost $1 billion worth of its stock sold by early employees and investors in 2024.

This happened right after it secured a UK banking license, which gave the company more credibility and attracted serious institutional buyers.

That deal wasn’t just about one company. It showed how private firms are using the secondary market to bring in fresh investors without going public.

At the same time, it gave early stakeholders a chance to get paid without waiting for an IPO. More companies are following this model—letting employees and founders sell some shares as the company grows instead of locking everything in until the finish line.

Angel Investing Is Still a Thing

Despite the rise of new investment tools and funds, angel investing remains strong, with 2023 figures showing an average deal size of approximately $243,000 and a median of $104,000. These are private individuals backing startups at a really early stage, usually before any big firms get involved.

Angels usually bring more than money—they often help with advice, hiring, or industry connections. But it’s a risky game. Startups at that stage fail all the time, there’s no guarantee of a return, and it can take years to find out if a company will succeed.

So, angel investing only makes sense if you know what you’re doing and you’re okay with taking big swings that might not pay off.

Pre-IPO Funds Are Growing Fast

If picking startups one by one is not your game, pre-IPO funds offer a broader way into the private market. These funds pool capital and spread it across several late-stage private companies, offering a way to invest in firms nearing an IPO or other major milestones.

This setup gives investors more exposure to growth without betting everything on one company. It also solves the problem of access, since many top companies stay private for a long time, regular investors would not be able to get in otherwise.

Pre-IPO funds fill that gap, but long lock-up periods and added fees make them anything but a fast-return play.

Public Companies Give You a Piece of the Action

There is also a more indirect route to private investing: buying stock in public companies that hold stakes in private ones. For example, Microsoft has invested in OpenAI, and Salesforce has money in Databricks.

If those private companies do well, it can boost the value of the public company’s stock.

But the impact is usually small. These investments are often just one part of a much larger business. So, even if you technically hold a stake in something exciting, it probably will not make a big difference in your returns unless that private stake becomes massive.

Do Your Homework

Investing in private companies is not like buying stock on the public market. These companies do not have to share much financial info, and there’s no easy way to check their books or performance.

That means doing proper research is a must. You need to understand what the company does, who is running it, whether the market it’s in is growing, and how it stacks up against the competition.

This kind of research is harder because the data is limited. You often have to go by pitch decks, team bios, and scattered updates.

But skipping that work is risky. If a private investment goes south, there is no quick exit. You are stuck until something changes.

Where Things Are Headed

The private investing world has opened up a lot. What used to be mostly for insiders is now full of different ways to get involved.

Whether it is secondary deals, angel rounds, pre-IPO funds, or even public companies with private stakes, there is no shortage of paths to take.

Still, it is not simple money. These investments are less liquid and carry way more risk.

But the trade-off is the chance to see some real profits before companies hit the public markets. If you are serious about private investing, the key is to know why you’re getting in, how long you’re willing to wait, and how much risk you can afford.