The window for high-net-worth clients to invest in pre-IPO equity has widened, but the real challenge for advisors has shifted from securing a seat at the table to ensuring the table itself is built to institutional standards. That is the central argument from Dean Rubino, chief executive of KPC Private Funds, who contends that the infrastructure surrounding private-market investments now matters more than the ability to source a deal.
Rubino points to a structural shift in corporate finance: companies are staying private far longer than they did two decades ago. SpaceX, for instance, was founded in 2002 and remained private for over 20 years before any IPO speculation. Its secondary-market valuation doubled between 2021 and 2024, Rubino notes, illustrating how much enterprise value is created before a public listing. With firms like Anthropic and OpenAI approaching eventual IPOs at multibillion-dollar valuations, the opportunity cost of waiting for a public debut has only grown.
For advisors, the proliferation of special purpose vehicles (SPVs) and tokenized securities has made pre-IPO shares more accessible than ever. But Rubino warns that many of these vehicles lack the institutional framework required for a fiduciary relationship. “When an advisor is seeking access, they need a platform that has the institutional infrastructure and framework around it,” he told InvestmentNews. That framework, he says, must include custodial acceptance at major RIA custodians such as Schwab, Pershing, and Fidelity, so that holdings appear on client statements.
Beyond custody, Rubino emphasizes the need for institutional pricing that avoids the markups common in direct-to-consumer offerings. He also calls for documented professional diligence, annual third-party audits, and a defined liquidity period or end date—critical protections when an IPO is delayed or canceled. Without these features, clients risk being locked into illiquid positions with opaque valuations.
The rise of self-directed platforms has fueled a narrative that advisors are an unnecessary middleman in private-market investing. Rubino rejects that view. “I don’t see the advisor as a middleman,” he said. “I see them as adding value by making that institutional-caliber infrastructure available to you.” Many high-net-worth clients, he notes, accumulated wealth through concentrated 401(k) positions or single patents, not through a career in finance. They have capital but lack the diligence skills to vet private equity stakes independently.
Rubino advises advisors to run a rigorous due-diligence checklist before recommending any pre-IPO position. Key questions include: Are you on the cap table? Do you actually own the asset or merely a derivative? Are the shares common stock or preferred shares from a Series D, E, or F round? Preferred shares often carry warrants, anti-dilution provisions, or dividend rights that materially alter risk profiles. The recent controversy at Anthropic, where the board voided any stock transfers without explicit approval, underscores the importance of understanding ownership rights.
Fee transparency and operational simplicity are equally critical. Advisors should verify whether pricing includes hidden markups and whether the vehicle undergoes an independent annual valuation. For firms managing dozens or hundreds of accounts, onboarding paperwork must be scalable. Rubino also notes that while clients must meet accredited-investor thresholds, advisors themselves do not need specialized venture-capital credentials. “They just need to understand what the company does and what its prospects for growth are,” he said.
The broader context is that private-market infrastructure is still catching up to demand. As highlighted in a recent Corastone CEO interview, outdated systems continue to hamper wealth manager allocations. Meanwhile, the IPO scarcity premium can mask long-term underperformance, reinforcing the need for diversified, infrastructure-backed private market access. For advisors, the message is clear: access alone is no longer enough.
