Toast, Inc. is a great example. They are an all-in-one point-of-sale and restaurant management platform that started raising VC money in 2013. After raising almost $850 million in 8 years, Toast saw its private market valuation escalate to $4.8 billion (as of their Series F), before its IPO. Had an investor participated in the Series F round (a price per share of $9.08) they would have gained 340% and 588% at IPO price and first close price, respectively.
As of the end of Q1 2022 you would still be up 139%, however if you got in at IPO you would be in the negative. In fact, from IPO on September 22, 2021 until the end of Q1 2022, the loss would have been (-58.80)%. If you have held the NASDAQ over the same period, the loss would have been (-5%).
Furthermore, had you held a basket of private stocks, such as is represented in the benchmark Prime Unicorn Index, you would have been down (-8.1%).
From the analysis, pre-IPO would be a better investment strategy than waiting for the Initial Public Offering. The data in the charts below clearly prove investing in the last round prior to IPO would have been much more lucrative than waiting until IPO to put capital to work.
The Prime Unicorn Index is currently tracking 144 companies with valuations of $1 billion or more to be considered into the index. Components must be headquartered in the U.S. and be privately held. For more information on the Prime Unicorn Index, please visit primeunicornindex.com.