In today's VC-heavy tech landscape, unicorn status is almost cliché. Every day, there's a new pre-IPO company with a $1B valuation and $XX billion potential valuation on the horizon. These unicorns are everywhere, but that doesn't mean they aren't valuable. In fact, these pre-IPO companies have some of the most potential for investors - especially if you can identify which ones are worth investing in before their official launch and how to invest in them at an early stage when their valuation is low. If you want to invest in future unicorns like Discord, here's what you need to know about why thier valuations are so high and how you can cash in your returns.
Discord is a voice, text, and video app that allows gamers to communicate. It's particularly popular with gamers who play multiplayer games on PC or consoles, like Fortnite and Overwatch. The company was founded in 2015 by Hammer & Chisel, a VC-funded gaming company based in Los Angeles. Discord has a $750M pre-IPO valuation and $150M in VC funding from IVP, Greylock, Index, and Tencent.
The first thing to note is that the $750M valuation is a pre-IPO valuation. Pre-IPO companies are funded but haven't gone public yet. That means Discord is currently worth $0 on the public markets but will likely be worth a lot more when they launch its IPO. That's important because the pre-IPO valuation determines how much investors are willing to bet on a company before it goes public. Discord's $750M valuation represents the total amount of money investors are willing to put into the company before it launches, which means there is high growth potential. Because there's a lot of hype surrounding Discord, the company is likely to launch with a more expensive valuation and more money than they requested.
First, you need to identify pre-IPO companies that are worth the investment. That means researching companies with strong potential and a good team, but that isn't yet trading publicly. Most of the best pre-IPO companies don't actively advertise that they're pre-IPO. That's because pre-IPO companies are largely unregulated, and anyone can invest in them. That makes it easier for scammers, who can trick people into investing in a fake company and never pay them back. Because pre-IPO companies are so unregulated, investors must do as much due diligence as possible. Tools such as INTELLI and TABS Suite, as well as Crunchbase, offer additional information on companies. Crunchbase fetches information on the latest news for specific companies, allowing you to be caught up to date with all relevant info for your company. INTELLI and TABS Suite offer more fine-tuned data for companies and utilize AI and ML to provide insightful data for any due diligence needs.
Now that you know what a pre-IPO company is and how Discord is worth $750M, it's time to start researching. Visit pre-IPO websites like Pre-IPO.com to find potential pre-IPO companies.