PRE IPO SWAP
Traders Reality has collaborated with to connect traders who have an interest in IPO’s. If you are reading this, then you are aware the benefits that an IPO offers. For those who are not aware, an IPO is a company that decides to list itself on the stock market and is introduced to the market as a “Initial Public Offering”.
Who is PRE IPO Swap?
PRE IPO Swap is Run by a group of Wall St Veterans. There are offices world wide, San diego, Atlanta, New York City, London, Bermuda and The Bahamas.
What is PRE IPO
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Pre- IPO investing provides Accredited investors accessibility to mature, mostly, multi billion dollar companies that have yet to go public. The idea of a IPO is lucrative, however it is possible to resell shares of the company, privately through a Pre IPO Swap. The transaction is private, however completely transparent to both the purchaser and the seller.
Pre IPO investing carries risk, as with all speculative investments, especially when they are privately traded. Public companies are required to comply with many Federal and State regulations that private companies are not required to. Thus it is more difficult for investors to obtain accurate and/or audited information regarding private companies. However it is also possible to generate a high return on investment such as 1000% or even greater.
To visualize the process of how a Pre IPO Swap works, below is the image of participants, as in any market, the buyers and sellers.
Buyer sare investors who want to buy the Pre - IPO shares. Who are the sellers? Why would anyone want to sell their shares? Well the answer is explained below.
There are two types of sellers. Employees and Angel Investors.(VC’s)
Good talent is incentivized to work at cash strapped startups with stock options and other stock related bonuses. This model works and so is widespread in early stage, growth companies. When employees get access to their stock (it is often restricted, both in time and in quantity) they usually sell it to get the money. Often they will not sell all of their stock, but they will usually sell most of it as it is really part of their otherwise would be salary.
Angel Investors (VC’s)
Angel investors who were the original investors or early round, may have waited for years and want an exit. Often they may sell some shares to pay expenses, taxes, or to liquidate and make other investments. The fact that early stage investors sell out is not a sign the stock is going down (the thinking may be, why don’t they just hold if it is likely to go up?). The fact is most institutional investors will liquidate some of their holdings on an ongoing basis for a number of reasons. They may also buy more – just because a VC sells some of his private stock doesn’t mean he won’t try to buy it back in a few months or years if he learns something.
Key Differences Pre IPO Investing
Pre IPO Investing is certainly not for everyone. But if you are looking for alternatives, it certainly is better than other options. In fact, the Pre IPO investment market has grown substantially in the past 5 years, making the Unicorn space almost crowded (see image):
However, this does not mean that there are no choice deals to be made, not all of these will IPO.
What Have Analysts Said About 2019 IPO Season?
What “Surprise” do you see in the market that isn’t currently getting sufficient investors attention?
For the U.S. IPO market, there are still only about 200-250 IPOs in a typical year, far reduced from the usual 700 per year in past decades. Combined with enormous amounts of available capital in the world seeking returns, the relatively small supply of new issues creates a supply/demand imbalance. So, it isn’t terribly difficult to make money on IPOs, assuming investors avoid overpaying for over-hyped new issues.
Pre IPO Investing is the best time to get in, the reason being is when a company IPO’s, it’s being made for the consumer. That’s a positive for consumers, however not always for investors. Investing in the beginning of a company does carry risk because you are not aware if the model is going to fail or succeed.
Below is a chart of the common phases of company growth and development.
The ideal place to invest, with ‘just the right’ amount of risk and reward – is Phase 3 (Pre-IPO). Earlier phases have high risk (even 100% risk, a startup can completely fail). Later phases have much less risk and much less returns. The average ‘new’ issue IPO has returned between 12% – 14% from the IPO date to a year out – a good return, but nothing like the Pre IPO returns of Facebook and others like it.
NOTICE:Information taken with permission from PreIPOSwap.com. PreIPOSwap.com is a website – they are not a broker-dealer or fiduciary. They connect buyers and sellers. They are not a broker or custodian. They will never ask you for money.