Pre-IPO

A Pre-IPO stock (or Pre-IPO investment) is an investment in a late-stage, venture capital-backed private company that is expected to go public, or experience some other liquidity event (such as an acquisition), within the next 2 to 5 years. Please note that The Spaventa Group prefers not to use the term “Pre-IPO”, as it implies that a company will definitely go public when in actuality, there is no guarantee that any company will undergo an IPO within a specific timeframe (or at all). Pre-IPO is the commonly used industry term, but investors need to be aware of the nuances. 

The Spaventa Group is a leading firm in the Alternative Investment space and has a superior level of expertise in Pre-IPO investing. Although individuals can invest in Pre-IPO stocks via various online platforms and other dedicated “Pre-IPO firms” that operate in the shadows, TSG is a comprehensive Alternative Investment firm that combines white glove service with meticulous investment analysis and exhaustive due diligence to provide our clients with an unmatched investing experience. You can contact TSG via phone or email, and one of our Investment Consultants will reach out to you for further discussion. After confirming your status as an accredited investor, we can begin the investment process as described above under “The Process” in our Pre-IPO primer.

No. You will own interest in one of our private investment funds which owns the company’s shares directly or indirectly (via another investment fund). You will technically own “units” of  a “series” which represent interest in a specific company. These units will translate one-for-one to that company’s shares post-liquidity event. We do not offer stock directly to clients.

TSG purchases its shares directly or indirectly (via another fund), and holds these shares, or interest in these shares, within the TSG portfolio. Once our firm receives certifications from a selling shareholder or confirmations from the fund in which we have invested, we then offer these interests to our clients via one of TSG’s funds. Once you sign a Subscription Agreement indicating interest for a specific investment series within our fund and fund your investment, you will receive documentation from our firm confirming your investment within 2 to 3 business days. There are extremely rare instances where our firm will NOT own interest in a specific company and will be in the process of closing on an investment (for example, if we are waiting for a ROFR [another tab link to investopedia] period). On these rare occasions, our team will be transparent and notify you that there will be a waiting period prior to us closing on said interest. In these situations, we cannot send a confirmation document until we are officially confirmed ourselves. In these rare situations, our clients typically receive confirmations within 30 days. 

Yes. Per SEC rules, you must be an accredited investor to invest Pre-IPO. For individuals, an accredited investor is someone who maintains an annual income of at least $200,000 for the previous 2 calendar years OR maintains a net worth of $1,000,000 excluding his / her primary residence OR maintains an annual income of $300,000 jointly with a spouse. Our firm also conducts business with entities such as trusts, corporations, LLCs and partnerships, as well as institutions like QIBs, hedge funds, family offices and charitable organizations.

Yes. And although investing via a self-directed IRA is the most common vehicle for Pre-IPO investing, you can also invest with a non-directed retirement plan. You can contact us via phone or email, and one of our Investment Consultants will reach out to you with more information.

Our firm adheres to our “Core Four” values of innovation, integrity, client commitment and standards of excellence. We maintain outstanding relationships with all of our clients and go above and beyond to not only meet our clients’ standards, but exceed them. We have heard horror stories from some clients who have done business with other, substandard firms and we are nothing like them. TSG has already built a solid reputation with both our clients and our professional network, and we relish the opportunity to continuously affirm our status as the best Alternative Investment firm in the industry.

The Spaventa Group is not a brokerage firm –  we are an Alternative Investment firm that creates and manages a family of investment funds. As such, we are not registered with any governing body that regulates broker-dealers. The individual funds that we offer to investors are filed with the SEC under Regulation D, but TSG itself is not registered with any specific governing body (nor is this required). TSG considers compliance as a crucial component to our business. We monitor all who are contracted and / or employed with the firm for both quality control and compliance. We also maintain strict cybersecurity and internal controls, conduct KYC protocols (such as AML checks on all new clients) and stay abreast of industry developments in real time. Additionally, per SEC regulations, our clients are exclusively accredited investors.

Our firm is a leading Alternative Investment firm. Alternative Investments are non-traditional investments like Venture Capital, Pre-IPO, Digital Assets, Art, Real Estate, Hedge Funds, etc.

Currently, we offer investment opportunities in Venture Capital and Pre-IPO, and we recently launched both a Digital Asset and Real Estate initiative within our internal portfolio. We will begin offering our clients exposure to these asset classes in the very near future.

It depends on the method of going public. Traditionally, a company will go public via IPO and there will be a 6 month “early investor lockup” restriction in place. In this common scenario, early investors are restricted from selling their shares for a period of 6 months after the IPO date.  Other methods of going public include: 1) the company listing directly on an exchange (which typically does not involve the early investor lockup period, and 2) the company going public via a special purpose acquisition company (or “SPAC”), where each deal has its own specific terms. Regardless of the way your investment goes public, once the restriction is lifted on the shares, our fund will begin the process of transferring your interest in our fund to the underlying unrestricted shares you own (less any carry-fee attributable to your investment). Companies may also get acquired in the private market and terms are dependent on each specific deal. Please note that there is no guarantee that any Series you invest in will go public and that there is always a possibility for an investment interest to stay private.

The Spaventa Group, of course!

Although The Spaventa Group utilizes its robust institutional network to acquire Pre-IPO shares, we may occasionally purchase shares or interest in Pre-IPO shares from individual investors. In order for our firm to do so, we would have to verify the source of the investment (e.g., if the interest is owned via an SPV), conduct all appropriate KYC procedures, and determine the likelihood of ROFR [another tab link to investopedia] (if acquiring insider shares). The Pre-IPO shares or interest you offer would also have to be on our existing prospective investment list, and the potential offering to us would need to have a minimum size of $5 million.

We typically select 3 to 5 Pre-IPO investments per calendar year after conducting rigorous valuation analysis and exhaustive due diligence.

Because these companies are still private, there is no “live” pricing. Our firm can monitor pricing movement on the institutional side, but this information is strictly for internal use.

TSG will assist you with your Pre-IPO investment. White glove service and speaking to an actual Investment Consultant is highly recommended.