Investing in Pre-IPO rounds

Investing in Pre-IPO rounds

Pre-IPO shares are available to purchase once the company intends on getting listed on the stock exchanges, generally, during the latter stages of the process. There is no clearly defined timeframe that states when one can start buying pre-IPO these shares. Pre-IPO shares are held by big private equity funds, venture capital firms, banks and asset management companies, along with the promoters of the company. These Asset management companies and venture capital firms offer investors to invest in pre-IPO shares via pre-IPO funds. However, the minimum amount to be invested in these pre-IPO funds should not be less than Rs 1 crore, according to sebi guidelines. Hence mostly only high networth individuals and family offices can invest in such funds. To buy shares directly from the company is much more complicated, and can only be done if one has contact with the insiders of the company who are already shareholders of that company.