PRE-IPO MARKET OVERVIEW
PTN provides its members with access to pre-IPO investment opportunities, once reserved for institutional investors and ultra high-net-worth investors. PTN’s structure allows for a seamless investing experience and ability to liquidate positions, pre and post IPO.
WHY HAS THE PRE-IPO MARKET DEVELOPED?
- Private companies around the globe are staying private longer than ever before. Interest rates were near zero for an extended period and there are an increasing number of Angel, Venture, and Private Equity Funds, so access to capital is in abundance. At the same time, the regulatory environment, operational requirements, and costs associated with going public have led companies to stay private longer.
- The current model enables companies to stay private longer and get the access to capital they need while simultaneously providing access to large, well connected, and ultra wealthy investors. Unfortunately, most investors are only given an opportunity to invest once a company goes public, which is after a significant amount of growth has taken place in the private market.
- The demand from investors, coupled with shareholders’ need for liquidity has created a robust secondary market for shares of private companies. Unfortunately, there are still several issues with the current market dynamics.
CHALLENGES IN THE PRE-IPO SPACE
Access: Historically, investing in the pre-IPO space was reserved for a limited network of institutional and well-connected investors. In addition to the challenge of gaining access, high investment minimums have priced many investors out of the market.
Liquidity: For some of these investments there is a limited and inefficient secondary market, and it may take years before a liquidity event.
Trust: When acquiring shares through a special purpose vehicle or fund structure there is additional counter party risk. This is potentially the most important issue as firms have been caught selling “fake” shares.
PTN’s Solutions
Access: PTN provides members with the ability to invest in any of the companies listed on the platform. PTN has developed a network of investors, brokers, and funds to actively source investment opportunities based on member demand. We help democratize access by offering a reduced minimum investment size ($10,000 for your first transaction – no minimum size going forward).
Liquidity: PTN’s structure provides members the ability to buy or sell. PTN cannot guarantee that you will be able to buy or sell as there may not be supply or demand, but the mechanism is in place to efficiently transact.
Trust: PTN operates as a regulated entity in Bermuda and has engaged trusted third parties, who oversee, regulate, and audit PTN.
- Banking and Custodial services are provided by Bermuda Commercial Bank who use Deutsche Bank in NY as their intermediary bank.
- Wakefield Quin provides some of the top legal expertise in Bermuda and the Harbour Financial Services division provides fund administration services.
- PTN is regulated by the Bermuda Monetary Authority (“BMA”).
- PTN is audited by Weaver and Tidwell, L.L.P.
Previous Exits
Investors have successfully leveraged the platform to sell their shares prior to an IPO. Below are companies that were available on our platform prior to their IPO, where PTN delivered proceeds (shares and/or cash) to members:
Lyft
Airbnb
Palantir
Spotify
SoFi
Join the Network
Step 1: Account Opening – Members must confirm their status as an accredited investor, review the Private Placement Memorandum (“PPM”), and complete the subscription documents.
Step 2: Fund Your Account – After necessary KYC and AML checks are done and subscription docs are approved, members can fund their account.
Step 3: Invest – Once an account is funded, members are provided log-in credentials and can invest in any of the companies available through PTN.
We’re here to help. A PTN representative will work with you through the account opening and funding process as well as providing a demonstration of how to use the platform. Members can reach out to the PTN team at any time with questions or requests, including investing in current deals, selling shares, or requesting access to investments that are not currently available on the platform.