Pre-IPO

- Refers to a private company in the stage immediately preceding its initial public offering. Investments during this phase are often made by institutional or accredited investors.

Scenario:

A hedge fund participates in a pre-IPO round for a high-profile biotech firm, seeking to capture upside before the public listing.

Why This Matters:

Access to IPO pop, invest at a discount, enhances returns, diversifies portfolio.

The Process:

The fund negotiates allocation, reviews lock-up terms, and models exit scenarios post-IPO.