How a typical scheme works
- The lead. A sales agent cold-calls from a purchased list, often targeting retirees and people with brokerage accounts.
- The hook. A household name (SpaceX, OpenAI, Anthropic, Stripe, Databricks) and a story about an imminent IPO.
- The vehicle. You're offered units in an LLC or fund that says it holds the shares, not the shares themselves.
- The price. The fund bought shares at one price and sells you its units at a much higher one. The difference is a hidden fee.
- The pressure. "Allocation closes Friday." "No fees, we only get paid at IPO."
- The aftermath. Statements are sparse, the IPO doesn't come, or the shares never existed. Sometimes the same people reappear under a new firm name.
Common types of pre-IPO investment scams
| Type | What happens | Example from SEC cases |
|---|---|---|
| Boiler-room markup funds | Real shares, sold through cold calls at undisclosed markups | Spaventa (2026), StraightPath/Legend (2024), Prior 2 IPO (2023) |
| Phantom ownership | Fund claims to own shares it doesn't | Keyport (2024); Adit Ventures (2026) |
| Adviser misappropriation | Manager uses fund assets for itself | Meyer Global (2026); Adit Ventures (2026) |
| Platform misrepresentation | Online platform misstates pricing, availability, or compliance | Linqto executives (2026) |
| Fake shares and clone sites | Nothing is bought at all; money is simply stolen | See fake pre-IPO shares |
Who gets targeted
SEC complaints describe victims as mostly retail investors, frequently retirees. Accredited investors are targeted with "exclusive access" framing (see accredited investor scams). Former victims are targeted again by recovery scammers.
Why pre-IPO stock scams work
- Private companies publish little information, so prices are hard to check.
- Ownership runs through layers of LLCs that investors can't easily verify.
- The investments are illiquid for years, so fraud surfaces late.
- Famous names create fear of missing out.