How to buy shares at the IPO?

[Shamurai]

I want to buy shares at the IPO of a new company, invest in a startup, tell me where to start.

[Urkail]

There are a few tips at once:

• Study the list of companies preparing for an IPO provided by the broker. For example, such a calendar can be found here.
• Having decided on the company in which you are going to invest, try to find as much information about it as possible in order to assess the investment prospects. Be prepared: tracking real data and numbers about a small, non-public organization can be difficult. Yes, the broker usually provides basic information, but it is advisable to back up your investments with something more significant. For example, analytics of a public offering by a competing company.
• Do not neglect the information from the broker. Be sure to read the terms of participation (requirements for an investor, commissions, minimum amount) to find out how the company is going to use the collected funds, how the distribution of shares will take place and the forecast of future income.
• Be careful. Don't overestimate your expectations, even if everything speaks of a huge return on investment. An IPO is a rather "vague" investment, which, due to the format itself, does not allow making clear forecasts.
• Do not forget about the lock-up period. A lockup is a formal agreement obliging investors for a certain period of time (usually from several weeks) to hold the shares received at the IPO. It is set by the issuer or investment bank in order to avoid a rapid drop in quotations. A lockup can completely block the sale of an asset or impose an increased commission on operations - this point is usually clearly indicated by the broker.