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How to Find the Hottest Pre-IPO Companies

AvatarBen Sturgill ·

We all know how traders make a killing when a stock goes public… heck, there are multiple ways to trade an IPO once it hits the market.

However, what you might not know is the fact you could invest in some of the hottest companies BEFORE they go public — and that opens up the doors for a bevy of opportunities. If you know me, you know I love to research companies ahead of an IPO.

The thing is, there are angel investors out there who could get in on the action way before… and turn small amounts of cash into wealth. 

Previously, this wasn’t possible for the everyday investor… but modifications to the JOBS Act opened the floodgates, and finally, we can tap into the massive potential returns in pre-IPO companies.

Before you start to look for ways to throw down bets on private companies… you need to understand how funding works and the different stages in the process.

 

A Government “Loophole” Makes It Easy For Us to Invest in Startups

 

The end goal for many startup companies is to go public… there’s no other feeling like listing your company on NYSE or Nasdaq — that’s when they become “unicorns”.

However, before they even try to raise capital from the public… these startups go through various rounds of funding. There are the pre-seed, seed, Series A, Series B, and Series C funding rounds.

Until the JOBS Act was introduced, you had to be a high-net-worth individual to even invest in private companies… but now you could invest with as little as $50.

Here’s how it works…

 

Pre-Seed Round

 

This stage is the earliest funding round. Companies are ready for liftoff and want to get themselves off the ground. Typically, friends and family, and even the founders, very close supporters, etc. will put their money behind these companies.

 

Seed Funding

 

Companies plant the “seed” in this round in an attempt to grow their business… and ultimately they want to grow into a “money tree”, providing their investors with lucrative opportunities. Seed funding allows a company to bring attention to the company…

… and this is when venture capital companies and angel investors start tapping into the massive potential growth.

In this stage, we could see the company raise anywhere between tens of thousands to millions of dollars… and then the companies move onto the next stage.

 

Series A

 

Once a company has developed a base for its operations, investors start to analyze the fundamentals… they’ll look at revenues, users, customer base, earnings, and plenty of other key performance indicators (KPIs).

If and when a startup reaches this stage, they look to optimize and scale their operations… and that’s when we start to see some big investors come into play and throw millions down to bet on the company.

The thing is, we can take advantage of this stage and get in on the ground floor.

 

Series B

 

This is often thought of the “building” phase of a company. Once they pass the developmental, the company tries to expand its market. When they raise capital in this stage, the company wants to build a successful product and grow its team… and this is when we start seeing some heft valuations.

It’s not crazy to see these companies valued between $20M to $60M in this phase.

 

Series C

 

When a company makes it to Series C, it means they are very successful and starting to take shape of a publicly-traded company.

The series C stage is when investors want to see how the company scales its operations. Generally, the company has already shown proof of concept in the U.S… but these angel investors want to see how it fairs with competitors.

The company needs to prove it can expand its operations across the globe… and take market share. Once they do that, we’ll see some investment banks, hedge funds, and private equity firms start to pour in.

Generally, we see companies leverage their Series C funding to boost valuations and hype their IPO. 

 

How Elite Investors Generate Massive Returns

 

Imagine you could get in on the ground floor of a company like Amazon.com (AMZN). When AMZN first started, about 20 outside investors put down a $50,000 stake for a little less than 1% of the company.

If all those investors held their shares… that little investment would’ve been worth BILLIONS today. That’s right, a measly $50,000 investment would’ve been worth more than $8B, a whopping 172,485X their investment.

Heck, if you were able to invest $1,000… that would be worth over $100M.

The thing is, back then… it wasn’t easy for everyday investors to tap into that potential… but that’s all changed now…

And on Wednesday, November 20 at 8:30 PM EST, The Boardroom will reveal a government “loophole” that allows you to tap into some of the hottest companies out there and potentially generate out-of-this-world returns. 

This is an invite-only event, and spots are filling up fast… don’t put this off a second longer and register now.

 

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