Pre-IPO, or pre-initial public offering, is a late-stage for a private company to raise funds in advance of its listing on a public exchange. It is a private sale of large blocks of shares before a stock is listed on a public exchange. Pre-IPO investing refers to buying shares in a company before the issue actually opens. Here are some key points to understand about pre-IPO:

• Investors: The buyers are typically private equity firms, hedge funds, and other institutions willing to buy large stakes in the firm. Pre-IPO stocks are demanded by PE investors, hedge funds, HNIs, and family offices. Pre-IPO investing is generally restricted to high-net-worth individuals with a sophisticated knowledge of the financial markets.

• Advantages: By raising more funds, a private company gets an opportunity to mature and better prepare for an IPO. Pre-IPO investors invest in private firms several months or years prior to their listing, and they "freeze" their investments for a longer period of time in the hope of receiving quality assets. Pre-IPO investing can offer individuals the chance to get in early, rather than waiting until a company has grown to the point of going public.

• Risks: Pre-IPO investing has its share of risks such as illiquidity, difficulty in choosing the right companies, and losing the whole capital invested. The bet in any pre-IPO investment is that the company will come out with an IPO and give you an exit. There is a risk that the company will postpone IPO for a longer period or cancel it altogether.

It is important to note that pre-IPO investing can involve significant risk for investors, and pre-IPO offerings targeted at the general public are often fraudulent and illegal. Before investing in any pre-IPO opportunity, it is important to do thorough research and understand the risks involved.