Pre-IPO Scams: What Looks Exclusive Is Often Just Fraud

Pre-IPO investing has become a popular marketing pitch – especially over the last year. The idea is simple: get access to a company before it goes public.

The SEC has issued repeated warnings about so-called “pre-IPO” opportunities being offered to individual investors. They’re still seeing complaints. And they’re still taking enforcement actions. These are not fringe incidents – they’re happening through email, social media, even from people claiming to be licensed professionals.

Here’s How It Typically Works

You’re told there’s a private company – often in a hot sector like AI, green tech, or crypto – that’s planning an IPO “soon.” The person pitching it says you have a rare chance to buy in early. Maybe they claim they’re part of an exclusive network, or that they only make money if you do. They may show you slick websites or mock-up investor decks.

But there’s no proof the shares exist. There’s no access to the actual company. There’s no regulatory oversight. In many cases, it’s not a private offering at all, it’s just a lie.

These scams prey on investors who’ve heard just enough about how the private markets work to believe this might be legit.

What to Watch For

• Unregistered individuals or firms offering securities
• Aggressive, urgent language (“this will fill up fast,” “IPO is imminent”)
• Promises of access to deals “usually only available to the wealthy”
• Comparisons to Amazon, Facebook, or other past IPO success stories
• No documentation or only vague materials, with no real offering terms

It’s easy to dress these scams up in the language of exclusivity. But exclusivity without verification is just another way to block scrutiny.

What Real Platforms Are Pitching

Some legitimate platforms do offer pre-IPO shares, especially in well-known private companies. SpaceX is one of the most commonly named – often through secondary sales where early employees or investors offload a portion of their equity. Other high-profile names that pop up include Stripe, Databricks, Klarna, and Instacart to name a few. These companies haven’t gone public yet, which creates buzz and buzz creates risk.

Platforms like EquityZen, Forge, and Linqto facilitate these types of transactions. They’re not scams, but they also aren’t open to everyone. Minimum investments are often high, shares may be bundled in pooled vehicles, and liquidity is limited. Plus, you’re usually buying at a premium, long after the “ground floor” moment has passed.

Bottom line: there are legitimate platforms. But they’re selective, expensive, and structured for informed investors – not casual speculation. If someone is pitching a name like SpaceX with no paperwork, no registration, and no guardrails, that’s not access – it’s bait.

If you’re being pitched a pre-IPO opportunity and it’s not coming through a registered investment platform, stop. This space is full of misrepresentation, and the SEC knows it.

And if the deal sounds like you’re being offered something usually reserved for billionaires – ask why you’re suddenly the exception.