Your Money
Ever hear of someone who invested early in a local company before it made it big?
In the past, these opportunities were often limited to the business owner's friends and family — people who provided much-needed cash when banks weren’t an option. Today, the same idea still exists, but on a much larger scale. Now, instead of friends and family, it's ultra-wealthy individuals and institutional investors like private equity firms stepping in. This is done through a pre-IPO placement — a private sale of large blocks of shares before a company officially goes public. Investors typically get a discount on the expected IPO price to account for the risks involved, including uncertainty about the company’s future public valuation. For companies, it’s a smart way to raise capital, offer liquidity to employees and early investors, and help ensure a smoother IPO down the road.
At PWM, we believe strongly in diversification — across stocks and bonds, large and small companies, domestic and international markets, public and private investments. Pre-IPO placements are one way we strategically diversify the private equity portion of our portfolios. If interested in learning more, let's talk and see if it's right for you.
A Side Hustle for Friends of Musk: Selling Access to Stakes in His Private Companies
by Susan Pulliam, Corrie Driebusch, and Becky Peterson
|
