Retirement strategies are quietly evolving as market volatility, persistent inflation, and longer lifespans challenge conventional approaches to planning for the future.
What once passed for diversification no longer feels sufficient in a world where companies are staying private longer and innovation often happens out of view of public markets. As investment behaviors adapt, more individuals are broadening their approach to align with how and where value is created today.
Among the growing set of alternative options, one segment is gaining traction: pre-IPO investments. Once reserved for institutions and insiders, access to these opportunities is expanding—and bringing with it the potential to reshape modern retirement portfolios.
Why Investors Are Turning to Private Markets for Growth
Private markets have steadily moved into the spotlight, not just as complements to public investments, but as essential components of a forward-looking portfolio. From private equity and real estate to venture and private credit, these assets provide exposure to sectors and stages of growth often unavailable in the public sphere.
Pre-IPO shares, in particular, offer a unique entry point. These are companies in the late stages of private growth—often well beyond proof of concept, but not yet listed on a public exchange. In recent years, many of the most valuable companies—think SpaceX, OpenAI, or Stripe—have built the majority of their value while still private.
This shift has changed how and when investors can participate in innovation. For those willing to explore beyond the traditional, private markets represent an important evolution in diversification.
The Benefits and Risks of Pre-IPO Investing
Pre-IPO investments allow investors to enter earlier in a company’s lifecycle—potentially before major valuation jumps associated with going public. While access and liquidity remain important considerations, the potential upside has driven renewed interest in this area.
Data from Alto’s recent survey reinforces this trend: nearly 70% of respondents reported some allocation to alternative assets, highlighting a broader movement toward investment strategies that reflect how companies generate value today.
Historical performance further supports the role of private markets in long-term planning. Over the past two decades, private equity has delivered strong annualized returns, with certain asset classes outperforming many traditional public market benchmarks. This long-term trend reflects the advantages of investing earlier in a company’s growth cycle and the active management strategies often employed in private markets. While private assets have historically delivered strong returns, these investments carry higher risks and may not be suitable for investors.
How Pre-IPO Shares Fit into a Diversified Retirement Portfolio
It's important to view pre-IPO shares not as a silver bullet, but as a potential complement within a well-diversified strategy. Compared to early-stage venture investments, late-stage private shares typically involve companies with more established operations and clearer paths to liquidity. Still, they carry risk, and require careful due diligence.
When held alongside other alternatives—like income-focused private credit or real estate with inflation-buffering potential—pre-IPO allocations can add a layer of differentiated growth to a retirement portfolio. Especially when held in tax-advantaged accounts like self-directed IRAs, they present a set of possibilities worth considering.
Exploring Pre-IPO Opportunities in Today’s Market
As the IPO market shows signs of renewed momentum and private companies continue to stay private longer, investors are asking better questions about when—and how—they engage with growth. Pre-IPO investing is one answer among many, but it’s a compelling one for those ready to rethink the boundaries of their retirement strategy.
To dive deeper into these insights, explore Alto’s latest white paper:
“Redefining Portfolio Diversification: The Overlooked Power of Pre-IPO Investments.”
This communication is for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any securities. Pre-IPO investments are generally available only to accredited investors and involve a high degree of risk. Please review all offering documents and disclosures before investing.
