Pre-IPO Shareholder Perks

Before companies go through an initial public offering (IPO) they will often need to raise funds. As with any business these funds will often be used for securing or expanding premises, developing the businesses ways of working or preparing for an IPO.

Companies that are pre-IPO are considered much higher risk compared to companies that have gone through an IPO. They often have less capital and are smaller and less desirable companies. On top of this there is no guarantee that an owner of shares in a pre-IPO business will find a buyer. Making it much harder to recover any funding in the situation that an investor wants to recover an investment.

Because of this, often companies that are in a pre-IPO stage will offer shareholders bigger and better perks as a way of improving the proposition for investing. If you are looking to build a portfolio of shareholdings that give you discounts or special offers off things you regularly use then these shares give you a great platform. However, they do come with increased risk and this should be considered.

One platform for buying shares in a company that is pre-IPO is Crowdcube. It is an equity crowdfunding platform where investors can invest directly into a company. Big companies like Brewdog, Gohenry, Freetrade, Monzo and Mindful Chef have all raised equity on crowdcube. Another is Seedrs which has hosted organisations like Green Lithium, Ahascragh Distillery, Revolut, Cheeky Panda, Cuvva, Oddbox and Ocean Saver.