How to Verify a Pre-IPO Investment Before You Send Money

Part 1: How to check if a pre-IPO broker is legitimate

• Get their full legal name, CRD number, and firm. A registered rep has a Central Registration Depository (CRD) number. If they won't give it to you, stop.
• Search FINRA BrokerCheck. Confirm current registration, that the firm matches your documents, and that they're registered in your state. Read every disclosure.
• Search the SEC Investment Adviser Public Disclosure site if they say they're an adviser, and read the firm's Form ADV and Form CRS.
• Search the SEC Action Lookup for Individuals for past SEC actions.
• Ask: "Have you ever done business under another name?" Then search those names too.
• Call the firm at the number listed on BrokerCheck, not the number the salesperson gave you, and confirm the person works there.
• Check your state regulator through NASAA.

Part 2: Verify the fund, SPV, or company

• Get the exact legal name of the entity from the subscription agreement, not the marketing name.
• Find its Form D on EDGAR. Note the related persons, the exemption (506(b) or 506(c)), the first-sale date, and any sales compensation recipients. Run every name through BrokerCheck and SALI.
• Look up the entity in the state business registry where it was formed (often Delaware) and check the formation date.
• Check the SEC's PAUSE list of unregistered soliciting entities and impersonators.
• Ask for proof of ownership: a company-approved stock transfer agreement, a transfer-agent statement, or the documents for each underlying SPV.
• Get the fund's cost per share in writing and compare it to your price and the company's last reported funding round.
• Identify the administrator, auditor, and bank, and contact them using information you find independently.