Pre-IPO Offerings

[ffp504]

I have been talking with a company about investing. My money would buy cheap 15cent shares. The company expects and are planning to do an IPO in the next few years and these stocks will be very valuable of course. A non qualified investor can get in for as low as 5k up to 150k. I have done research on the head of the company plus I am close to someone who is close to him and vouches for his character. I also have met several people in the organization, several partners and a few investors. He, his team and everyone seems legit. I just feel I must still do all of my due diligence. I have done a bit of research online about what questions I should be asking. Can anyone give me some more ideas of what I should ask and look out for?

Thanks,

 

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[Solrac]

He, his team and everyone seems legit.

Isn't this almost a red flag?

Whenever I had an experience with someone that "seems legit", I either haven't done my research well enough. Or they're not legit.

 

[Trivium iz rC]

I have been talking with a company about investing. My money would buy cheap 15cent shares. The company expects and are planning to do an IPO in the next few years and these stocks will be very valuable of course. A non qualified investor can get in for as low as 5k up to 150k. I have done research on the head of the company plus I am close to someone who is close to him and vouches for his character. I also have met several people in the organization, several partners and a few investors. He, his team and everyone seems legit. I just feel I must still do all of my due diligence. I have done a bit of research online about what questions I should be asking. Can anyone give me some more ideas of what I should ask and look out for?

Thanks,

Your not investing your gambling.

Just by your short post that you wrote all I hear is "Hype Hype & Hype". Sounds like you got the "Start-up Bug" someones got a million dollar idea and they need to raise capital right away & go public. Not to burst your bubble but I've hear this on the daily from people who randomly "Found there calling" to be a entrepreneur" or "Joe Blow gets an offer to invest in the next big start-up for cheap".

Just by how you said "Company Expects to do an IPO within the next couple years". I can tell you have no idea in what your doing, your basically saying "The Investors & executives are looking to get a rediculous valuations & then dump all there shares and cash out once it goes public". Thats not a business opportunity just a pump & dump just like all the other stupid start-ups right now.

How will you get your money back besides selling your stock on the IPO date? Whats the timeline? Are you willing to invest more money if nothing goes as planned? Will your shares get diluted if you don't keep investing in the next fund raising rounds? Since there prob a C-Corp you know that they will be paying the highest corporate tax rates.

If they were so valuable in the means of a business creating massive cash-flows why wouldn't they just keep the company private & distribute dividends for eternity while paying lower tax rates as an S-Corp.

The wealthiest American Men in history never got wealthy from CAPITAL GAINS (Aka selling there shares/company). They produced there massive wealth by cash-flow. (John D Rockefeller, Andrew Carnagie, Cornelius Vanderbuilt, Henry Ford, Sam Walton, Bill Gates, Warren Buffett)

Before I ever make any investment I always ask myself. What form of ROI will I receive my investment from? Capital Gains or Cash-Flow.

 

[GuestUser113]

Isn't this almost a red flag?

Whenever I had an experience with someone that "seems legit", I either haven't done my research well enough. Or they're not legit.

 

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[jpmartin]

From The Lone Wolf Of Wall Street...

1. Don’t speculate unless you can make it a full-time job.

2. Beware of barbers, beauticians, waiters — of anyone — bringing gifts of “inside” information or “tips.”

3. Before you buy a security, find out everything you can about the company, its management and competitors, its earnings and possibilities for growth.

4. Don’t try to buy at the bottom and sell at the top. This can’t be done — except by liars.

5. Learn how to take your losses quickly and cleanly. Don’t expect to be right all the time. If you have made a mistake, cut your losses as quickly as possible.

6. Don’t buy too many different securities. Better have only a few investments which can be watched.

7. Make a periodic reappraisal of all your investments to see whether changing developments have altered their prospects.

8. Study your tax position to know when you can sell to greatest advantage.

9. Always keep a good part of your capital in a cash reserve. Never invest all your funds.

10. Don’t try to be a jack of all investments. Stick to the field you know best.

 

[BigBrianC]

Do they have revenue? Profit? Debt? But more importantly, do they have a pingpong table in the office?