From private equity to going public: An article explaining the core profit logic and risks of Pre-IPOs

In the crypto market, truly astonishing returns are often not generated after tokens are listed on exchanges, but have already been seeded during the private fundraising stage. When ordinary investors buy in through exchanges, early private investors may have already realized profits of several times, dozens of times, or even hundreds of times. Understanding the profit logic of Pre-IPOs (pre-listing private investments) is a core skill that every crypto investor must master.

The First Layer of Profit in Pre-IPOs: Private Sale Discount

Private sales usually occur before the project’s TGE (Token Generation Event). At this stage, project teams sell tokens to institutions or early investors at a significant discount below the future listing price, to raise initial funds and ecosystem resources. This discount is the first cornerstone of private sale profit logic.

In April 2026, the AI-driven private market access platform IPO Genie sold over 12.8 billion tokens during its presale phase, recording a pre-sale return of 1,308% from the first stage. The presale price was about $0.00013810 per token, while the announced listing target price was $0.0016 per token—meaning early buyers had roughly an 11-fold upside from presale to listing. Further analysis indicated that if the token price continued to rise to $0.00691 after listing, early investors could potentially achieve returns of up to 50 times.

Early entrants during the private phase locked in costs far below the public secondary market pricing through valuation discounts. This is the fundamental logical support for Pre-IPOs profits.

Listing Realization: Price Difference Is the Starting Point, Unlocking Is the Key

The real profit from private sales comes from the huge gap between the market-determined true price after listing and the private sale cost. When the project officially lists on exchanges like Gate, and the secondary market begins to price the token, the paper gains of early investors become apparent.

However, private sale profits are not simply “buy low, sell high.” Unlocking terms are a critical variable in determining actual returns. Most projects set vesting and lock-up periods for private sale tokens, meaning investors cannot sell all their tokens on the first day of listing. For example, the RWA platform KAIO’s private allocation was fully locked on TGE day, with a 12-month lock-up period followed by a 24-month linear unlock. This means private investors need to go through the full cycle of market fluctuations and project growth to gradually realize their paper profits. In this model, both time and price dimensions are equally important.

Exit Strategies: Unlock Windows and Market Play

The ultimate profit for private investors depends on the timing and method of exit after unlocking.

On April 9, 2026, crypto venture capital firm Continue Capital completed a large unstaking operation of 603k HYPE tokens, valued at approximately $23.3 million at the time. On-chain data shows that the firm’s related wallet had previously unstaked and actually sold 320k HYPE tokens. If a similar proportion is assumed, the potential sell volume could be between 300k and 400k tokens. This case clearly illustrates the real choices private investors face during unlock windows: whether to hold or to sell at a high, requiring a market liquidity trade-off.

Another notable case is Pi Network. In May 2026, the project faced a 184.5 million token unlock, worth nearly $50 million, coinciding with the mainnet protocol upgrade window—such “positive news and unlock overlap” often lead to intense short-term price volatility, a risk private investors need to be especially cautious of.

A New Paradigm of Tokenization: How Gate Pre-IPOs Lower Participation Barriers

Besides directly acquiring discounted tokens through private sales, Gate’s Pre-IPO mechanism offers a new pathway for ordinary investors to participate. This is a platform-based and digitalized approach to traditional Pre-IPO investing, allowing users to engage in the value changes of companies before they go public under unified rules.

Tokenization is the core of this mechanism. The platform tokenizes traditional Pre-IPO equity or financing rights via blockchain technology, creating new digital assets that can be subscribed to and traded within the platform. Users do not need to open overseas securities accounts or meet high net worth thresholds; holding stablecoins like USDT is sufficient to participate.

Take Gate’s first project, SpaceX (SPCX), as an example: the subscription price is $590 per SPCX, implying a SpaceX valuation of about $1.4 trillion. The total quota is set at 33,900 SPCX tokens. After subscription begins, within just 24 hours, the total subscription amount exceeds $353 million. Regarding exit, users can choose to hold SPCX until SpaceX goes public to exchange for stock tokens or convert to USDT at market price. They can also trade freely in the pre-listing market after asset distribution. Additionally, SPCX has a 24/7 continuous pre-market trading platform, meaning users don’t necessarily need to hold long-term to realize gains before listing.

This model essentially brings the core features of a public market—price expectations, liquidity, trading behavior, and sentiment—into the pre-listing phase. Originally, only top-tier venture capital could access unicorn Pre-IPO opportunities, but now they are opening to a broader user base.

Risk Warning: High Returns Come with High Risks

In the profit logic of Pre-IPOs, higher returns often mean greater underlying risks.

For example, the recent listing performance of Cerebras, an AI chip company, saw its IPO priced at $185 on NASDAQ, with the first-day opening price soaring to $350, and a peak of $385 during the day—an 89% increase on opening, with a market cap surpassing $80 billion. However, in mid-May 2026, OpenAI and Anthropic tightened their share transfer policies, directly impacting the Pre-IPO token market. ANTHROPIC tokens on PreStocks plummeted about 40% within 24 hours, and OPENAI products also declined over 30%. This event clearly shows that pre-listing trading expectations heavily depend on market sentiment and company fundamentals; any policy change can trigger sharp volatility.

Additionally, different exchanges may have significant pricing discrepancies for the same asset. For example, SpaceX’s pre-market contract on OKX is around $2,000, while Gate’s SPCX is about $600, with large divergence in implied valuation and price trends. The crypto Pre-IPO sector is rapidly expanding, with notable differences in product structure and risk exposure across platforms. Investors need to carefully and prudently evaluate.

Summary

From private sale discounts to listing price spreads, from unlocking mechanisms to exit strategies, the profit logic of Pre-IPOs is not simply “early entry guarantees profits.” It requires investors to simultaneously grasp three core variables: cost advantage, timing, and exit options.

Cost advantage stems from valuation discounts during private phases, serving as the fundamental profit guarantee; timing depends on the alignment of unlocking terms with market cycles, requiring resilience through volatility; and exit strategies involve making prudent decisions to realize profits at market peaks or before unlocking pressures release.

Gate’s digital Pre-IPO mechanism, through tokenization, provides a new channel for global users to participate in top-tier company listings before going public. Regardless of the participation method, fully understanding the underlying logic of Pre-IPOs is essential for balancing the pursuit of excess returns with risk management.