Each method has different risk levels, accessibility requirements, and return profiles. Read each carefully before deciding which fits your situation.
Method 1: Become an accredited investor
Risk: High — illiquid, binary, no guarantee of returnAccessible to: Only if income > $200K / net worth > $1M
- Meet SEC accredited investor standards: $200K annual income ($300K joint) OR $1M net worth excluding primary residence
- Access private company shares through crowdfunding platforms (EquityZen, Forge Global, Hiive) or direct secondary market transactions
- Expect minimum investments of $10,000–$100,000+; shares may be subject to transfer restrictions
- Understand you will have no public market to sell into until IPO — could be 1–10+ years
- No prospectus, limited financial disclosure, limited shareholder rights compared to public company stock
Method 2: Secondary market platforms
Risk: High — pricing opacity, transfer restriction riskAccessible to: Accredited investors only (most platforms)
- EquityZen, Forge Global, and Hiive are the largest pre-IPO secondary marketplaces
- Sellers are typically employees with vested RSUs or early investors seeking liquidity
- Prices are negotiated; you may pay a significant premium to last fundraising round valuation
- Transaction fees of 3–5% are common; settlement can take 30–90 days
- Transfer restrictions may require company approval — some companies (SpaceX did historically; Anthropic does) restrict secondary market transfers
- Positions are illiquid until IPO; if the company goes private again or faces down round, losses can be severe
Method 3: Invest through venture capital ETFs
Risk: Moderate — diversified, liquid, lower upsideAccessible to: Anyone with a brokerage account
- DXYZ (Destiny Tech100) is a closed-end fund that holds pre-IPO shares in companies including OpenAI, SpaceX (pre-IPO), Anthropic, Stripe, and Databricks
- AGIX (ARK Venture) provides similar exposure through ARK's private company portfolio
- These trade on public exchanges like any stock — fully liquid, no accredited investor requirement
- Significant caveat: both DXYZ and AGIX often trade at large premiums to net asset value — you may be paying $2 for $1 of underlying private company exposure
- Expense ratios are high (1–2.5%) and the underlying NAV is uncertain due to private company valuation difficulty
Method 4: Invest in strategic corporate investors
Risk: Low-moderate — indirect exposure, diluted upsideAccessible to: Anyone with a brokerage account
- Google parent Alphabet (GOOGL) has invested billions in Anthropic and is the company's primary cloud and distribution partner
- Microsoft (MSFT) owns ~49% of OpenAI's for-profit subsidiary through its $13B investment commitment
- Salesforce, Spark Capital, and Amazon also have Anthropic stakes — Amazon has committed $4B+
- NVIDIA (NVDA) has taken strategic stakes in multiple AI companies including Mistral, Cohere, and others
- This approach gives you indirect upside to private company success, diluted by the rest of the parent company's business — lowest risk, lowest potential return from AI startup success
Method 5: Wait for the IPO
Risk: Lowest risk — public market, full disclosure, day-1 liquidityAccessible to: Anyone
- The safest approach: wait until the company files an S-1 and goes public, then evaluate the IPO on its merits
- You will pay a market price on day one, not a pre-IPO discount — but you will have a prospectus, public financials, and a liquid market
- Participating in IPO allocations at the offering price requires a brokerage with IPO access: Fidelity, Schwab, and E*Trade all provide IPO access to qualifying customers
- Buying after IPO means paying the opening-day premium over the offering price, but also having the most price discovery and market transparency
- For most retail investors, waiting for the IPO and buying on the first earnings miss is a better risk-adjusted strategy than paying private premiums