Can You Buy Stock Before a Company Goes Public?
Erik James Roberts — Founder & CIO, Infinitus Wealth Management. Purple Heart recipient, Wharton MBA.
Updated October 1, 2026
Yes, you can buy stock before a company goes public. Shares of a private company exist long before its IPO, held by founders, employees, and early investors, and accredited investors can acquire them through a direct purchase, a secondary marketplace, a pooled pre-IPO fund, or a single-company vehicle offered through an advisor’s custodian. The stock does not trade on an exchange, so the purchase works differently from tapping buy in a brokerage app, but the ownership is real and the opportunity is larger today than at any point in the modern market.
For most of my career, the answer for anyone outside a venture fund was technically yes, practically no. That has changed. This article covers the full picture: who owns a company’s stock before it lists, why more of the growth now happens in private hands, who is permitted to buy, the four ways in, how the price gets set, and how a pre-IPO position stacks up against buying on IPO day.
Pre-IPO Investing Is Available to Infinitus Clients
Infinitus clients have access to pre-IPO investing in select late-stage private companies. These are businesses that have not yet listed on a public exchange, the stage where much of a company's growth now happens before everyday investors can buy a share. Availability rotates, is limited to accredited investors, and is never guaranteed, and securities regulations limit what we can say publicly about specific offerings, including which companies are available at any given time. If you are an accredited investor with a company in mind, contact us. We will talk through whether a position like this fits your overall portfolio, and if it does, we can check whether that company is currently available.
The practical side is simple. There is no separate platform, no outside login, and no standalone paperwork firm. Eligible clients subscribe through our custodian, Altruist, with digital signatures, fund the investment from cash in their account, and once the subscription settles the position appears on the same statements as their other holdings.
Who Owns a Company’s Stock Before It Goes Public?
A private company has shareholders from day one. Founders hold common stock. Employees earn options and restricted shares that vest over years. Venture capital and growth investors buy preferred stock in each funding round, and every round sets a new price per share. By the time a company is a decade old, its ownership table can hold hundreds of investors and thousands of employees.
Many of those holders eventually want liquidity. An engineer who joined in 2016 may want to buy a house. An early fund may need to return capital to its own investors. When they sell, the buyer is acquiring real shares of the company, which is how you buy stock before a company goes public in the first place.
Companies manage these transfers carefully. Most charter documents give the company a right of first refusal and require board approval for any sale, and securities law adds a reason to keep the shareholder count manageable: a private company with more than 2,000 holders of record (or 500 non-accredited holders) and $10 million in assets must begin filing public reports. That is why many pre-IPO purchases are made through a vehicle that counts as one shareholder on the company’s books while holding shares for many investors.
Why Has the Chance to Buy Stock Before a Company Goes Public Grown?
Two long-running trends explain it. First, the IPO door narrowed. According to University of Florida professor Jay Ritter, an average of 310 operating companies went public in the United States each year from 1980 through 2000. From 2001 through 2025 the total was 2,824, or about 113 per year. There were 72 operating-company IPOs in 2024 and 90 in 2025.
Second, the companies that stay private have grown enormous. CB Insights counted 82 private companies valued at $1 billion or more in early 2015. By November 2020 there were 495, by January 2022 there were 963, and by November 2025 the count reached 1,334 with a combined valuation above $5.4 trillion. Growth that once showed up in public portfolios now compounds for years inside private ownership tables.
Put those two trends together and the conclusion is simple. If you only buy after the opening bell, you are choosing to enter later in a company’s life than investors did a generation ago. Learning how to buy stock before a company goes public is one way to move your entry point earlier.
Who Is Allowed to Buy Stock Before a Company Goes Public?
Pre-IPO offerings are private placements under Regulation D, so they are generally limited to accredited investors. As an individual, you qualify if you meet any one of these tests:
Income: more than $200,000 in each of the past two years ($300,000 with a spouse or spousal equivalent), with a reasonable expectation of the same this year.
Net worth: more than $1 million, alone or jointly, excluding your primary residence.
Professional credentials: an active Series 7, Series 65, or Series 82 license in good standing.
Your spouse’s income and assets can count toward the joint tests even if the position will be held in your name alone. Some vehicles require the higher qualified purchaser standard, generally $5 million in investments, and the offering documents state which applies. A full walkthrough of qualification and the access paths is in our guide to how to invest in pre-IPO companies.
Four Ways to Buy Stock Before a Company Goes Public
Each route gives a different answer to the same questions: what do you own, where is it held, and how many layers sit between you and the company?
1. Join the ownership table directly. Employees receive equity as compensation, and investors with the right relationships can buy into a funding round or purchase shares directly from an existing holder with the company’s approval. This is the purest form of pre-IPO ownership, and also the narrowest. Minimums run high, companies choose who they let in, and it requires access most investors do not have.
2. Secondary marketplaces. Online platforms match buyers with employees and early investors who want to sell. You open an account with the platform, complete its accreditation check, and bid on listings. Selection can be broad, though company approval can delay or cancel a trade, the position sits outside your main investment account, and each platform sets its own fees.
3. Pooled pre-IPO funds. A fund manager assembles a basket of private companies and you buy an interest in the fund. You get diversification and sometimes lower minimums, but you own the fund rather than the companies, pay the manager’s fees on top of underlying costs, and accept whatever the manager selects.
4. A single-company vehicle through your advisor’s custodian. You pick a specific company, subscribe to a vehicle that holds only that company’s shares, and the position is recorded in the same brokerage account as the rest of your portfolio. Your advisor evaluates the opportunity with you and sizes it against everything else you own. For investors who want to know exactly what they hold, this is the clearest line of sight: one company, one account, one statement.
How Is the Price Set When You Buy Stock Before a Company Goes Public?
There is no ticker to quote, so pre-IPO pricing works from reference points. The most important is the price per share in the company’s most recent funding round. Recent secondary transactions and any company-run tender offers add further data points. A seller or sponsor may price shares at a premium to the last round if demand is strong, or at a discount if the holder values liquidity more than the last dollar.
One structural detail matters. Funding rounds are usually priced on preferred stock, which carries protections such as liquidation preferences, while most secondary shares are common stock without those protections. A thoughtful buyer accounts for that difference rather than treating the last round price as a floor.
In a single-company vehicle, your subscription price is fixed at signing and becomes your cost basis. From that point until a liquidity event, any value shown for the position is an estimate derived from later rounds and secondary activity, not a market price. Your result is decided by the price you paid and the proceeds you eventually receive.
Fees shape that result. Common layers include a sponsor’s placement or structuring fee at subscription, annual administrative fees, and carried interest on gains, plus platform fees on marketplace trades or manager fees on pooled funds. Ask for every fee in writing. At Infinitus, we receive no commission, placement fee, or markup on any pre-IPO offering. Positions held in an account we manage fall under our standard advisory fee, which starts at 1.00% annually and steps down to 0.80% as assets grow.
Pre-IPO Stock vs Buying on IPO Day: What Is the Difference?
Buying on IPO day is open to anyone with a brokerage account, requires no accreditation, offers daily liquidity, and comes with the full public disclosure of a registered offering. Those are real advantages. The trade-off is the entry point.
Most individual investors do not receive shares at the IPO offer price. Those allocations go largely to institutions. The first available price for the public is the opening trade, and the data on the gap between offer price and first-day close is striking. Ritter’s figures show operating-company IPOs averaged a 29.3% first-day return in 2025, up from 15.3% in 2024, with a long-run average of 19.0% from 1980 through 2025. In dollar terms, 2025 IPOs left about $13.1 billion on the table, meaning value that transferred from the companies to whoever held shares at the offer price. Investors buying at the open paid the post-pop price.
A pre-IPO holder enters earlier still, at a price set privately months or years before the listing. That is not a guarantee of a better outcome. Some companies price their IPO below an earlier private round, and the pre-IPO holder also waits through a lock-up before shares can be sold. What it does change is where you sit on the timeline: before the offer price rather than after the first trade, with your entry decided by private-market research rather than opening-day demand.
What Happens to Your Shares When the Company Goes Public?
If you buy stock before a company goes public and the IPO arrives, your vehicle is typically subject to a lock-up of around 180 days. After the lock-up, it distributes public shares to your account or sells and distributes cash, depending on its terms. Distributed shares then sit alongside the rest of your holdings and can be managed like any other position.
If the company is acquired instead, the vehicle receives cash, acquirer stock, or both and passes the proceeds through. And some companies stay private longer than expected, occasionally running tender offers along the way. Each path is spelled out in the offering documents, which is why reading them is the single most valuable step in the process.
How Much Should You Put Into Pre-IPO Stock?
Pre-IPO ownership works best as a growth complement to a well-built core portfolio. Three questions set the size. Can this capital stay invested for five years or more? How much of your wealth is already tied to private companies, one employer’s stock, or one industry? And would your long-term plan still succeed if this position took far longer than expected to pay off, or did not pay off at all?
When those answers line up, a pre-IPO position can add a source of growth that public markets alone may not offer. The right amount comes out of a full view of your portfolio, income, and goals, which is exactly the work a fiduciary advisor should do beside you before the subscription documents are signed.
How Infinitus Helps Clients Buy Stock Before a Company Goes Public
I built Infinitus around a conviction that clients deserve to know exactly what they own. Our portfolios hold directly owned securities rather than layered fund products, and our approach to private companies follows the same principle: single-company access, not a basket someone else picked.
Through Altruist, the custodian that holds our clients’ accounts, accredited clients can subscribe to single-company vehicles that hold select late-stage private companies, with the position reported inside their existing account. Our Private Companies strategy has long drawn on curated deal flow from my Wall Street network and Wharton connections, and this capability brings that work to companies that have not yet listed.
My route to this work began a long way from a trading floor. I was in high school on September 11, 2001, enlisted to serve on the front lines, and left for the Army immediately after graduation. I fought for Baghdad as an infantryman with the 101st Airborne, and on my second deployment I was wounded leading men in a recon infantry unit and nearly bled out on the battlefield. I discovered investing through the Wall Street Warfighters Foundation while I recovered, then built on it with years as a wealth advisor and a Wharton MBA. Reconnaissance, understanding the terrain, and sizing every commitment so the mission survives a change in conditions: that is still how I evaluate every company we consider.
Specific opportunities are shared with clients once an advisory relationship is in place. You can learn more on our Pre-IPO Investing page.
Frequently Asked Questions
Can a regular investor buy stock before a company goes public?
Most direct pre-IPO purchases are limited to accredited investors under Regulation D. Non-accredited investors can gain exposure through certain registered funds that hold private companies, with their own fee and liquidity trade-offs, and pending legislation could add an exam-based path to accredited status.
How much money do you need to buy pre-IPO stock?
Minimums are set by each offering and vary widely, from the tens of thousands on some platforms and vehicles to far more for direct purchases. The more useful number is the share of your portfolio that belongs in a multi-year illiquid position, which depends on your full financial picture.
Can you buy pre-IPO stock in a regular brokerage account?
Yes, in some cases. Certain custodians now allow single-company pre-IPO vehicles to be held in the same brokerage account as your public investments, so everything appears on one statement. Infinitus clients can do this through Altruist, subject to account eligibility.
Is pre-IPO stock cheaper than IPO stock?
Not necessarily. Pre-IPO shares are priced from the last funding round and recent secondary trades, at a premium or discount depending on demand, while IPO shares are priced by underwriters at listing. Pre-IPO buyers enter earlier, which can mean a lower or a higher price than the eventual IPO.
Can you sell pre-IPO stock before the IPO?
Sometimes, but plan as if you cannot. Secondary sales require company approval and a willing buyer, and single-company vehicles are generally held until a liquidity event. Treat pre-IPO capital as money you will not need for at least five years.
How is pre-IPO stock taxed?
Most vehicles are partnerships that issue a Schedule K-1 each year. Gains on positions held longer than one year generally receive long-term capital gains treatment at sale or distribution. Secondary purchases usually do not qualify for the QSBS exclusion. Confirm your situation with your CPA before subscribing.
Own Tomorrow’s Public Companies Inside a Portfolio Built Around You If you are an accredited investor and want to understand how single-company pre-IPO access works inside your own account, start with an introductory conversation. We will review your full picture and help you decide whether, and how much, it fits.
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Important Disclosures Infinitus Wealth Management is a registered investment adviser. Registration does not imply a certain level of skill or training. This article is for general informational and educational purposes only and is not an offer to sell or a solicitation of an offer to buy any security. No specific offering is described or recommended. Pre-IPO investments are offered only to accredited investors, and in some cases only to qualified purchasers, solely through the applicable offering documents, which describe the vehicle, its fees and expenses, and its risks in full and should be read carefully before investing. Pre-IPO investments are speculative and illiquid, may result in the loss of the entire amount invested, and carry no guarantee that any company will complete an initial public offering, be acquired, or provide liquidity on any timeline. Values shown for private positions before a liquidity event are estimates derived from vehicle terms, funding rounds, and secondary market activity; they are not market prices or independently verified valuations. Availability of pre-IPO opportunities varies, and there may not be a live offering at any given time. Pre-IPO special purpose vehicles are made available through Altruist Financial LLC, member FINRA/SIPC, and are sourced and sponsored by Monark Capital Management LLC, an exempt reporting adviser. Neither Altruist nor Monark is affiliated with Infinitus Wealth Management. Infinitus receives no commission or other compensation from Altruist or Monark in connection with any pre-IPO offering; positions held in an account billed by Infinitus are included in the advisory fee described in our Form ADV. IPO first-day return statistics are historical averages across many offerings, measured from the offer price to the first-day closing price; they are not indicative of any specific offering or of future results, and individual investors generally cannot purchase at the offer price. Third-party data cited (Jay R. Ritter, University of Florida; CB Insights) is believed reliable but has not been independently verified. Charts are for illustrative purposes only. Infinitus does not provide tax or legal advice; consult your CPA and attorney. Not FDIC insured. SIPC protection covers custody of assets and does not cover investment losses. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. Advisory services are offered only pursuant to a written advisory agreement.
