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Investing in IPO and pre-IPO

This type of investment strategy provides profit from shares of private companies at the stage prior to initial public offering. We select the best companies that, by all indications, should go public in the next 1-3 years. These companies with capitalization over a billion dollars are already larger than many public well known companies.

Until recently, such investments were available only to the largest investors with amounts of 100 000 USD or more.

ALFATRUST has made this possible for everyone. 'The Starter' investment amount is 1000 USD.

OTC

— Market for shares of companies that have not yet gone public.

IPO

Initial public offering of shares on the stock exchange.

We are tracking the appearance of new high-yield niches

Our main strategy is to find so-called unicorns for no more than $ 3 billion. It happens that the estimates of the most famous startups are exaggerated and may not meet the expectations of a wide range of investors (as was the case with Domo, Dropbox and Snapchat). At the same time, companies with a valuation below $ 1 billion are too small and in most cases do not fit our risk-return strategy.

What we pay attention to

Predominantly American IT companies and software developers for medium and large companies.

These are business analytics, cloud services, cybersecurity, biotechnology and genetic engineering, tools for developers and business automation processes, hardware to optimize new technologies (artificial intelligence and machine learning).

We analyzed companies that have gone public over the past three years, and identified a number of trends. Our trained AI model showed us that companies with the following criteria have the greatest potential:

  • company age: 10-11 years old;
  • Revenue for the last 12 months: $ 150-250 million;
  • total investment for all rounds: $ 200-450 million;
  • company value in the last round: 1-3 billion;
  • last round before IPO: 15-24 months;
  • the presence of well-known venture capital funds among investors;
  • 170 more criteria for predictable and manageable outcome.

Stock cost

Offering IPO Pre - IPO Cost on pre - IPO Total income on pre - IPO is higher Total income on IPO is lower

Period

Compare the rise in value on the chart:

200 private technology companies (Pre - IPO), income pre-IPO

500 largest public companies in the USA, income S&P500

Overall, young private companies are growing faster than large public companies.

Source: crunchbase.com
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