How Retail Investors Can Get Exposure to Private Companies

Route 1: secondary sales of private shares

Employees and early investors sometimes sell private-company shares through regulated secondary platforms or broker-dealers. These sales are usually private placements, and the SEC notes that many offering exemptions limit participation to accredited investors (SEC, June 12, 2024).

An individual qualifies as an accredited investor with income over $200,000 ($300,000 with a spouse or partner) in each of the prior two years, net worth over $1 million excluding the primary residence, or a Series 7, 65 or 82 license in good standing.

Route 2: registered funds that hold private companies

Interval funds and other closed-end funds may invest in less liquid assets such as private companies, which can give individual investors indirect exposure to assets usually available only to institutions (Investor.gov, September 25, 2020).

The trade-offs are liquidity and price. An interval fund buys back only 5% to 25% of its shares at each repurchase offer, usually every three, six or twelve months, and a listed closed-end fund trades at a market price that can sit above or below the value of its holdings.

Route 3: buying after the IPO

To go public in the US, a company files a registration statement with the SEC, usually Form S-1, and its shares then list on an exchange. The underwriters place most shares at the IPO price with institutional and high-net-worth clients, so most individual investors buy once the shares trade (Investor.gov, October 14, 2022).

Segmara's free IPO calendar lists upcoming and recent IPOs, and SEC EDGAR shows a company's registration statement once it is public.

What Segmara does

Segmara is an independent research site: company pages with dated indicative marks where they exist, IPO articles with sources, a free email tracker and a free IPO calendar. Segmara does not sell, broker, or arrange share purchases, and nothing here is investment advice.