Late Stage Mature Pre IPO Unicorns -

Pre IPO Product Life Cycle – the Hamburger Analogy

New York, NY ( 1/17/2019 — Pre IPO Swap focuses on Pre IPO companies.  These are not necessarily ‘Unicorns’ but many are.  We get asked what is a private late stage mature company that qualifies for Pre IPO?  There isn’t a specific answer, some companies will be very late stage, others can be closer to the startup phase for example LYFT is not so old but already has filed for IPO.

We like to compare any business to food as it’s something everyone understands.  Let’s take the example of a Hamburger.  The first step in the cycle is the farm where the cow grows up.  Then at some point the cow is butchered and sent for processing.  Wholesale, the beef is then sold to food companies where it ultimately becomes a Hamburger and sold at McDonalds.  Finally, the end product is sold in thousands of locations across the world.  The last step in the process is garbage – capitalism produces a lot of garbage.  But science is inventing ways that garbage gets fed back into the system (for example, fertilizer).

So the question is – at what point do you want to invest in the company?  When it’s still a cow?  When the end product is being marketed on TV like McDonalds commercials?  Or in the cleanup phase?


We have called these steps in the cycle Growth, Processing, Branding, Distribution, Waste.  There are more detailed product cycles – this is simply to explain where Pre IPO is – typically it’s somewhere around Processing.  It’s the wholesale market.

When a company goes public – that’s the branding phase.  There is a road-show, the underwriter promotes the IPO so that when it hits the market there is interest (such as for Pinterest).

By the time the product – whatever it is – hits the end user (that’s the IPO) it’s been so watered down and over hyped it has little room for explosive growth.  And frankly, they don’t want stocks moving triple digits in a year it makes other stocks look bad.  They need to be tamed.  Companies that don’t fit the profile stay private.

With Pre IPO we are looking for just the right amount of risk and reward.  We want companies to already have been proven in the market – but before the marketing blitz.  Before the compliance changes that go on to fit the profile of a public company.  Ultimately, no matter what type of business you are – when you have to comply with rules it takes some of the zest out of your business; that’s usually a good thing.  Public markets allow capitalism to function at its best.  But for Pre IPO investors – they want to find the ‘Goldilocks Zone’ – not too risky, and just enough reward.  See our Pitch to learn more, or follow our blog.