News of the upcoming initial public offering (IPO) of SpaceX has lit up the investing community.
Unusually, it is expected that some ordinary retail investors will be able to buy in at the offering price, though those shares will be hard to come by
But some are interested in getting exposure to the company even before it goes public. Private equity firms often provide seed money to growing companies in exchange for partial ownership. If those companies successfully go public later, that gives those firms an easy way to sell their stakes on the open market and realize their gains.
But early access to potentially lucrative investments is why private equity funds have become a popular way to invest recently. If you’re looking for early portfolio exposure to SpaceX, though, I think there’s a better way to do it. Why it may not be a good idea There can be advantages to investing in companies while they are still private.