Investing Pre-IPO Has Never Been Easier - You Can Start with Just $50

Many folks don't invest, because they feel like they don't have the spare cash to start. Fortunately, that's not really the case. In fact, investing in pre-IPOs can be the perfect place to start.

Pre-IPOs are stocks that are offered before a firm's initial public offering (IPO). This gives folks the opportunity to snag stocks at great prices before they go public.

Often times, pre-IPO share prices are lower than the IPO price once the stock goes live.

Pre-IPOs happen when there's a lot of buzz driving up demand of a stock before it's trading publicly. But there's some level of risk that the shares won't be as in demand as expected. That's why pre-IPO shares are discounted, to offset the risk.

And the rewards of pre-IPO investing could be huge. Especially when the entry could be as little as $50...

The Great Potential of Investing in Pre-IPOs

Investing in pre-IPOs is also called "angel investing." Angel investors privately finance startups long before they go public. In return, angel investors are given a stake in that company.

And there are plenty of perks for being an early investor. Angel investors often get special stock options or a say in the business' direction.

Angel investors invest in the future profit potential a company has. Once a company's growth skyrockets and goes public, angel investors can become very wealthy.

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For a long time, pre-IPO investing was reserved for the rich - mainly large private equity firms, hedge fund companies, and even wealthy folks with a lot of capital.

You may have heard of famous people, like Ashton Kutcher, becoming an angel investor. The famous actor is now a well-known angel investor. And he's profited hundreds of millions since starting.

Kutcher invested $1 million into a startup called Skype. One year later, Microsoft Corp. (NASDAQ: MSFT) acquired Skype for $8.5 billion. This instantly quadrupled Kutcher's investment.

Since then, he's been hooked.

Even Amazon's founder, Jeff Bezos, has been known to dabble in angel investing. His venture capital firm, Bezos Expeditions, backed startups like Uber Technologies Inc. (NYSE: UBER).

His angel investments made him richer. But his own company was responsible for making others wealthy, too.

Amazon itself benefited from generous angel investors as well, 22 of which invested $50,000 each in the company in the mid-1990s. Today, those shares are worth $8.5 billion each.

That's an incredible 17,000,000% gain over the past two decades.

And sure, these investments involved tens of thousands of dollars. But nowadays, you no longer need that kind of money to take advantage of pre-IPO investing. In fact, savvy investors with as little as $50 can tap into this lucrative opportunity.

Get Started in Angel Investing with Modest Capital

[mmpazkzone name="in-story" network="9794" site="307044" id="137008" type="4"]You can take advantage of pre-IPO investments with minimal capital. To be successful, angel investors want to have a unique strategy.

There are inherent risks involved with investing in pre-IPOs, though. That said, the potential rewards can be exponentially higher. And this is emphasized by Kutcher's investment in Skype and the angel investors who backed Amazon.

Considering the risk, angel investing should consist of a small portion of your portfolio's capital.

In fact, we suggest the portfolio model of 50-40-10. This way, only 10% of the portfolio is dedicated to pre-IPO investments. Of course, different investment models can be considered based on what you're trying to do.

Though angel investing is riskier in nature, the returns can also be astronomical. As Amazon shows, those fortunate angel investors saw gains in the billions.

Because of the risk level of pre-IPOs, many will probably be duds. On the flip side, some might be real winners. And the winners see big enough gains to make the risk worth it - as long as the risk is offset with more reliable investments, of course.

That's why you wouldn't want to place all your eggs in one basket. Savvy angel investors will spread out their capital among several startups instead of only a few.

This is why you can actually make decent money investing with as little as $50 in a pre-IPO. Even if most of your angel investments tank, it only takes one to explode your investment.

In fact, it's best to invest a small amount of money in a bunch of startups instead of hundreds or thousands of dollars into just a couple.

This is a much different approach than traditional investing. It's not often that you'll see investors have all but one of their investments fail while still seeing big gains. All it takes is one winner to help that initial $50 turn into potentially tens of thousands or more.

It's no longer necessary to be rich to become a successful angel investor. Instead, angel investing allows anyone with minimal capital to get in on the ground floor. Getting in early can give you the opportunity to ride the wave a lot longer and higher for some huge returns.

Of course, investing in shares should only be done following great research. Money Morning only suggests investing after you've done your homework and feel confident your information is from credible sources. Caution should always be part of any investment, including angel investing.

And if you're looking for a place to get started, we've got you covered...

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Angel investing is taking the world by storm.

Everyday people from coast to coast are now backing little-known startups long before they IPO, and they’re exploding in value, becoming worth billions upon billions of dollars.

But when you’re in the position to have all of these exciting deals at your fingertips, you need a way to determine which could be winners - and which are nothing more than hype.

As you’ll see in this brief video, the Angels & Entrepreneurs Summit is exactly the ticket...

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