Pre IPO Swap (New York, NY) 1/29/2019 – Pre IPO Swap wants to explain to investors how important it is to get on the cap table and why it matters. First let’s explain what is a cap table – it is basically the ledger of shares in a private company. That means it is the list of who owns what stock. That’s it! It looks something like this:
Image Source: Carta.com
The idea is simple, however this fact is obfuscated from investors for a very nefarious and greedy reason. Pre IPO Funds which offer access to Pre IPO companies do allow you to participate in the investment but only as a passenger. They, their fund name, are the ones whose name will be on the cap table – NOT YOU.
They take 20% of your profits, charge other fees like exit fees – and strip you of your shareholder rights. They may give you your rights should a bad situation occur – but why should investors sign away their shareholder rights in the first place?
Pre IPO Swap is not a fund so that means if you buy shares of Lyft you will buy directly from the seller, and subject to a minimum investment will be placed on the cap table with all the other shareholders. Your name may even appear in the Prospectus (this would depend on many factors too complicated to explain here).
These so called “funds” take 20% of your profits, charge other fees like exit fees – and until – both conversion in and out of these Funds, you have NO shareholder rights (in the underlying company). Zero. None. You will have whatever rides dictated to you on the same boiler plate limited liability company. And then and only after you agreed to pay them 20% of your profits do they stop holding your shares hostage and transfer them to you.
Note that Pre IPO investing is for accredited investors only.
We want to also point out that getting on the cap table isn’t for anyone special – it’s for all investors. Access is not ‘restricted’ – it is just that you have to know what it is and know how to get it. Get it directly @ Pre IPO Swap.