How to buy stock in pre-IPO companies
So far in 2025, the S&P 500 Index – a broad measure of the U.S. stock market – has hit numerous all-time highs.1 By some metrics, the S&P 500 has never been more valuable, surpassing valuations seen in the dot-com bubble in the early 2000s.2 While public stocks could continue to rise, they could also decline. Either way, investors who only look to publicly traded stocks may not gain exposure to some of today’s most innovative and interesting companies that remain outside of the public market.
Simply put, private companies are staying private longer. Today, late-stage, unicorn companies are choosing to delay or even forego IPOs, staying in the private market for much longer than in the past. In 2014, startups took an average of just under seven years from founding to IPO, while in 2024 that timeline had expanded to nearly 11 years.3
In rapidly-innovative areas like AI, many companies have chosen to remain private, often because they could raise capital from sources outside of the public market. Many AI leaders — including OpenAI, Anthropic, xAI, Perplexity, and Databricks, among others — currently remain private. Beyond AI names, many prominent companies in other sectors, such as SpaceX, Anduril, and Ripple, also do not appear to be in a rush to go public any time soon.
How can investors buy equity in these pre-IPO companies? Unlike when buying a stock or exchange-traded funds (ETFs), investors cannot simply log on to their online brokerage account and click a button or two to execute a trade. Instead, they look to marketplaces like Forge that facilitate the matching of buyers and sellers of private company shares.
Who is eligible to purchase private company shares
Before diving into how investors can purchase pre-IPO shares, it is important to remember that not everyone is eligible to invest in private companies. Generally, institutional investors with assets above $5 million — such as pension plans, endowments and foundations, family offices and other large entities — and individuals who qualify as accredited investors can buy shares of private companies. Individual investors interested in pre-IPO shares should confirm they meet the SEC guidelines to become an accredited investor. Prospective investors on Forge are required to verify their accredited investor status before they can transact through the Forge platform, subject to applicable requirements.
How to buy shares of private companies on Forge
It is important to note that the process of purchasing shares of a private company is more complex than investing in publicly traded securities. Below is a general outline of the steps typically involved when purchasing pre-IPO shares of a specific company on Forge. Please click here for a more detailed explanation of the purchase steps.
1. Sign up
A prospective buyer signs up on Forge and confirms their status as an accredited investor.
2. Conduct research
At this stage, a buyer reviews available information on one or more private companies, subject to availability. In some cases, companies have a Forge Price™, which is a derived price for more than 200 late-stage, pre-IPO companies that synthesizes numerous public and proprietary data sources. It is important to note that Forge Price is for informational purposes only and is not necessarily the price at which a company’s shares will trade.
3. Enter a bid
An investor either chooses to accept a current ask from a seller or puts in a bid at a defined price and quantity of shares for a specific company. Investors can use the Forge Price™ (if applicable) and other data points, such as recent closed transaction prices, to inform their bid.
4. Agree on terms
Once a buyer and seller agree on the price and quantity, the transaction is accepted. Both parties complete all required paperwork, and the purchase activity enters the next stage.
5. Wait for the right of first refusal (ROFR) process
In many cases, private companies can leverage their ROFR, meaning they have the right of first refusal of any prospective transactions of their company’s stock. If the company chooses to exercise their ROFR, the buyer will not be able to complete the transaction. However, if the company declines to ROFR, the transaction may advance to the final stage.
6. Finalize the transaction
At this point, all documents are completed and funds are transferred from the buyer to the seller through Forge. The buyer becomes the legal owner of the company shares. The total process often takes between 45 and 60 days, though timelines could be hastened or expand significantly based on multiple factors.
It is important to note that the above steps apply to direct transactions between buyers and sellers on Forge.
In some circumstances, Forge offers funds called “special purpose vehicles” (SPVs) with a set price for a defined quantity of shares of a specific company. In these cases, the ROFR process is often addressed in advance, increasing the likelihood that a transaction will close. Investors who sign up on Forge can see which companies offer Forge funds as part of their review process.
Investing in the private market through pooled funds
The path outlined above applies to investors interested in owning specific private company shares. Increasingly, though, there are new ways for investors to gain broader exposure to pre-IPO stocks. In pooled Forge fund offerings (executed via SPVs), investors can gain exposure to the performance of a range of private companies — all in one fund.
For example, Forge’s Accuidity Megacorn Fund seeks to track the Forge Accuidity Private Market Index (FAPMI), a custom index featuring blue-chip pre-IPO companies.4 The Megacorn Fund is currently accessible only to qualified investors — those with assets exceeding $5 million — though similar funds with broader access may be on the horizon.
Why investing in pre-IPO stocks are here to stay
Investment markets continue to evolve constantly, and the private market is no exception. Even as the IPO market continues to be active, a range of private company shares may be available for purchase on Forge. And after a few rough years, new unicorns — startups valued at more than $1 billion — continue to be born. While not every investor can buy pre-IPO shares, for eligible investors interested in accessing innovative companies, the opportunity set continues to expand.
Take the next step
If you’re interested in purchasing shares of a pre-IPO company, we recommend reading “How to buy private shares on Forge: A complete guide,” which offers a more detailed, step-by-step guide to the process. And if you are familiar with the investing process, you can sign up for Forge today.
FAQs about how to buy pre-IPO stock
How can I buy stock in a company before it goes public?
Generally, accredited individual investors who meet SEC requirements and institutional investors with more than $5 million in assets are eligible to purchase shares of companies before they complete an IPO. Potential investors may use a marketplace like Forge, which facilitates the matching of buyers and sellers of pre-IPO company shares, in order to complete a transaction, subject to availability.
Which marketplace is best for buying equity in pre-IPO companies?
We believe that Forge offers potential pre-IPO investors the most comprehensive access to companies in the private market, backed by industry-leading propriety and secondary data and analytics to help them make more informed decisions.
What should I consider before buying pre-IPO shares?
Like other investments, purchasing pre-IPO shares carries both general and specific risks. Compared with publicly traded securities, shares of private companies are often far less liquid and may not be tradable until a company completes an exit. Other risks include lower pricing and valuation transparency compared with public securities, as well as the potential loss of principal, among other considerations.
What steps do I need to take to invest in a private company?
Before looking to purchase shares of a private company, we strongly recommend that investors conduct research and due diligence on the company, including but not limited to, using Forge data and analytics. Investors can see real-time data, as well as evaluate historical valuation, pricing, and trading activity, among other data points.
Why invest in the private market?
As many companies delay or forego IPOs, shares of some of the most innovative companies remain accessible only in the private market. The pre-IPO market may provide investors exposure to many of the leading names in AI and other in-demand sectors that are not traded on public exchanges.
Who can invest in the private market?
Unlike public market transactions, there are limits on who can buy shares of private companies. In general, institutions with more than $5 million in assets and accredited individual investors can purchase shares in private companies.
How do you get access to the private market?
Marketplaces like Forge offer a platform to facilitate the matching of buyers and sellers of private company shares, subject to availability. Individual pre-IPO stocks cannot be traded on traditional brokerages or apps.
What are the benefits and risks of investing in the private market?
Private market investing may offer the potential for investors to gain access to companies that otherwise may not be available in the public market. As many of the most innovative companies stay private for longer, investors may find opportunities in the private market.
Private market investing carries numerous risks, including but not limited to the potential for loss of value, limited liquidity for exiting positions, less transparency into financials and other data compared with publicly traded stocks, and other general risks entailed in any type of investment.
How does private investing work?
Private investing may include asset classes such as real estate, private equity (including shares of pre-IPO private companies), private credit and other types of alternative investments beyond publicly traded stocks, bonds and ETFs. Investors may be able to purchase private funds or other investment products to gain access to certain private assets.
At Forge, the private market refers to companies that are still privately held and not traded on a public exchange. Forge has created a marketplace to facilitate the matching of buyers and sellers of private company stock, offering industry-leading data and intelligence to assist participants in making more informed decisions.
