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How to Invest in Pre-IPO Startups (Without Being a Millionaire or a VC)

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    Jagadish V Gaikwad
    Twitter
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If we’re being real, most of us grew up thinking investing in startups meant being a Silicon Valley VC with a trust fund and a Rolodex full of founders. But the truth is, the door’s cracked open wider than ever — and you don’t need millions to play. I started dipping my toes into pre-IPO startups a few years ago, and honestly, it’s been a wild ride. Some wins, some losses, and a whole lot of lessons learned the hard way.

Pre-IPO investing means buying shares in a company before it goes public. If you get in early and the company does well, you could see some serious returns. But it’s not all rainbows and unicorns. There’s risk, uncertainty, and a lot of fine print. The good news? You don’t have to be a finance genius or a startup founder to get started. Here’s how I navigated it — and what I wish I’d known sooner.

Why Pre-IPO Investing Is Worth Considering

Let’s cut through the noise. The main reason people get excited about pre-IPO startups is the potential for outsized returns. If you invest in a company like Revolut or Deliveroo before they IPO, you could be looking at 5x, 10x, or even more on your money. That’s not guaranteed, of course, but the upside is real.

But it’s not just about the money. Investing in pre-IPO startups gives you a front-row seat to innovation. You’re backing the next wave of tech, AI, or fintech — and that’s exciting. Plus, it’s a way to diversify your portfolio beyond traditional stocks and bonds.

That said, it’s not a get-rich-quick scheme. Your money can be locked up for years, and there’s no guarantee the company will ever go public. Some startups fail, some get acquired for less than expected, and some just… fade away.

How I Got Started (And What I Learned)

I didn’t have a background in finance or venture capital. I was just curious, and I’d read a few stories about people making life-changing money from early-stage investments. So I started small — putting a few hundred pounds into a crowdfunding platform. I figured, worst case, I’d lose a bit, but I’d learn something.

The first company I invested in was a fintech startup. I liked the idea, the team seemed solid, and they were raising a pre-IPO round. I did my research, read the pitch deck, and took the plunge. Fast forward two years, and the company was acquired — not for a huge sum, but enough to double my money. Not bad for a first try.

But then I made a classic mistake. I got excited and doubled down on another startup — this time without doing enough due diligence. The company looked promising, but I didn’t dig deep into the financials or the team’s background. Long story short, the startup ran out of cash and shut down. I lost my entire investment.

That experience taught me a few things:

  • Not every startup is a winner.
  • Due diligence is non-negotiable.
  • Diversification is your best friend.

7 Ways to Invest in Pre-IPO Startups

Here are the most realistic ways regular investors can get involved, based on my experience and what I’ve seen work for others.

1. Crowdfunding Platforms

Platforms like Republic, Seedrs, and Crowdcube have made it possible for everyday investors to back startups. You don’t need millions — sometimes you can get in with as little as £100. These platforms vet the startups, provide pitch decks, and let you invest directly.

Pros:

  • Low minimum investment
  • Access to a wide range of startups
  • Transparent process

Cons:

  • Not all startups are vetted equally
  • Some platforms charge fees
  • Liquidity is limited (you can’t sell your shares easily)
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2. Join a Syndicate or Angel Group

Syndicates are groups of investors who pool their money to invest in startups. You can join as a limited partner and get access to deals that might otherwise be out of reach. Platforms like AngelList and SyndicateRoom make it easy to find and join syndicates.

Pros:

  • Access to vetted deals
  • Shared risk
  • Mentorship from experienced investors

Cons:

  • Minimum investment can be higher
  • You’re relying on the syndicate lead’s judgment

3. Use a Specialized Broker

Some brokers, like InvestEngine or Fidelity, offer access to pre-IPO shares. These are usually for accredited investors, but some platforms are opening up to regular investors. The process is similar to buying stocks, but the shares are private.

Pros:

  • Professional guidance
  • Access to exclusive deals
  • Easier to track your investments

Cons:

  • Higher minimums
  • Fees can be steep
  • Not all brokers offer pre-IPO shares

4. Attend Startup Events and Pitch Days

Networking is still one of the best ways to find pre-IPO opportunities. Attend startup pitch days, demo days, and industry events. You’ll meet founders, hear about new companies, and sometimes get invited to invest.

Pros:

  • Direct access to founders
  • Opportunity to ask questions
  • Build relationships

Cons:

  • Requires time and effort
  • Not all events are open to the public

5. Leverage Your Professional Network

If you work in tech, finance, or any industry with startup activity, use your network. Talk to colleagues, former classmates, or friends who might know about upcoming funding rounds. Sometimes the best deals come from word of mouth.

Pros:

  • Trusted referrals
  • Insider information
  • Lower risk

Cons:

  • Limited to your network
  • Not scalable

6. Invest in Pre-IPO Funds

Pre-IPO funds pool money from multiple investors and spread it across several late-stage startups. This is a way to diversify your risk and get exposure to multiple companies at once. Funds like Invesco Global Listed Private Equity ETF (PSP) offer indirect exposure.

Pros:

  • Diversification
  • Professional management
  • Access to top startups

Cons:

  • Fees can be high
  • Less control over individual investments
  • Lock-up periods

7. Buy Stock in Public Companies That Own Startups

If you want indirect exposure, you can buy shares in public companies that have stakes in private startups. For example, Microsoft owns a piece of OpenAI, and Salesforce has invested in Databricks. This is a lower-risk way to get in on the action.

Pros:

  • Lower risk
  • Easy to buy and sell
  • Exposure to multiple startups

Cons:

  • Less upside
  • Not direct ownership

What I’d Do Differently

Looking back, here’s what I’d change if I could start over:

  • Diversify more. I put too much into one or two startups early on. Now I spread my investments across multiple companies and sectors.
  • Do more due diligence. I used to rely too much on gut feeling. Now I dig into financials, team backgrounds, and market potential.
  • Set realistic expectations. Not every startup will be a unicorn. Some will fail, some will underperform. That’s normal.
  • Be patient. Pre-IPO investing is a long game. Your money can be locked up for years, so don’t invest anything you’ll need soon.

Mistakes to Avoid

Here are the most common mistakes I’ve seen — and made myself:

  • Chasing hype. Just because a startup is trending doesn’t mean it’s a good investment.
  • Ignoring red flags. If something feels off — unclear financials, inexperienced team, lack of traction — walk away.
  • Overinvesting. Don’t put all your eggs in one basket. Spread your risk.
  • Not reading the fine print. Understand the terms, fees, and lock-up periods before investing.

How to Evaluate a Pre-IPO Startup

Here’s a quick checklist I use when evaluating a pre-IPO startup:

FactorWhat to Look For
Business ModelIs it scalable? Does it solve a real problem?
Market PotentialIs the market growing? Is there demand?
Team ExperienceDo the founders have a track record?
Financial HealthRevenue growth, burn rate, funding history
Competitive LandscapeWho are the competitors? What’s the USP?
Exit StrategyAre they planning an IPO or acquisition?

My Opinion on Common Advice

A lot of people say, “Only invest what you can afford to lose.” That’s true, but it’s also a bit lazy. I think you should invest what you can afford to lose and do your homework. Don’t just throw money at startups hoping for a win. Be strategic, be patient, and be realistic.

Another piece of advice I disagree with is, “Only invest in startups you understand.” I think it’s okay to invest in sectors you’re not an expert in — as long as you do your research and talk to people who are.

Final Thoughts

Investing in pre-IPO startups isn’t for everyone. It’s risky, it’s uncertain, and it’s not a shortcut to wealth. But if you’re willing to put in the work, do your research, and accept the risks, it can be a rewarding way to diversify your portfolio and support innovation.

I’m not rich from my pre-IPO investments — but I’ve learned a lot, met some amazing people, and had a few wins along the way. If you’re curious, start small, learn as you go, and don’t be afraid to make mistakes.

What’s your experience with pre-IPO investing? Have you tried crowdfunding platforms, joined a syndicate, or invested in a fund? Share your story in the comments — I’d love to hear what’s worked (or hasn’t) for you.

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