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Why invest in pre-IPO companies: the value created before the IPO

Why invest in companies before their IPO? Because the largest technology companies stay private longer and much of their growth now happens before they list. Over the ten years to 16 October 2026 the Morningstar PitchBook Unicorn 20 Index, which tracks 20 of the largest private unicorns, recorded a total return of 814%, according to Morningstar. Qualified investors can take part in this phase through club deals.

Key takeaways

Growth has moved before the IPO

For decades, companies listed young and public investors captured most of their growth. Today the leaders of artificial intelligence, payments and software raise large rounds privately and list later, when they are already among the most valuable companies in the world.

Recent rounds show the scale: Anthropic announced a Series H at a 965 billion dollar valuation on 28 May 2026; OpenAI closed a round at 852 billion dollars on 31 March 2026 (CNBC); ByteDance was valued at 550 billion dollars in a stake sale reported by Reuters on 25 February 2026; Databricks raised at 190 billion dollars on 13 August 2026 (CNBC); Anduril doubled its valuation to 61 billion dollars on 13 May 2026 (TechCrunch).

What the index shows

The Morningstar PitchBook Unicorn 20 Index tracks 20 of the largest venture-backed private companies valued at 1 billion dollars or more. According to Morningstar, its total return over the ten years to 16 October 2026 was 814%. The index is a benchmark, not a product you can buy, and past performance does not guarantee future results; it shows where a large share of the value in technology has been created.

Large companies, not start-ups

Pre-IPO investing in the largest unicorns is not early-stage venture capital. These are established businesses with revenue, customers and years of operating history. Published data shows the difference: PitchBook measured company failure rates falling from 23.6% at Series A to 10.8% at Series E, on data as of 5 August 2021 (PitchBook Analyst Note, 1 December 2022). A later-stage company can still disappoint, but it starts from a different place than a start-up.

Why the window before the IPO matters

When a company lists, its shares become available to everyone at the price set by the market. Before that, access is limited to employees, funds and qualified investors who buy on the secondary market, where prices are negotiated: in August 2026 the median secondary trade was 3% below the last primary round (Forge Global, September 2026).

Several of the largest companies are preparing for the stock market: OpenAI confidentially filed for an IPO, as CNBC reported on 8 June 2026. Taking a position before the listing is how qualified investors take part in the phase that comes before it.

How to take part

Unicorn Club, the investor club of Unicorn Private, organizes club deals in 30 of the largest pre-IPO companies. Members choose the company and the amount, from 100,000 dollars per deal, and invest through a dedicated SPV that buys the shares on the secondary market. Membership costs 99 dollars a month or 890 dollars a year.

Investing involves the risk of losing capital.

Frequently asked questions

What is a pre-IPO company?

A company whose shares are not yet listed on a stock exchange, usually a large company in a late stage that may prepare for an IPO or a sale.

Can I buy pre-IPO shares on a stock exchange?

No. Before the IPO the shares change hands privately, with the company's approval. Qualified investors reach them through secondary purchases, vehicles such as SPVs and club deals.

What happens at the IPO?

The company's shares become listed. Pre-IPO holders are usually subject to a lock-up period before they can sell; after that, the vehicle can sell or distribute the shares according to its documents.

Which companies can I invest in with Unicorn Club?

30 of the largest pre-IPO companies in the world, including OpenAI, Anthropic, ByteDance, Databricks, Stripe, Waymo, Revolut and Anduril. The full list and the closing dates are in the app.

Related guide

Sources

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