Behind the Curtain: Lessons from IPOs and Pre-IPOs I Witnessed

Jenna Ryan
Jul 29
4 min read

When I look back on my years in the markets, the most electrifying moments were not always during a bull rally or a Fed policy announcement. They were in those hushed boardrooms and crowded roadshows where a private company prepared to step into the unforgiving glare of the public markets. IPOs and Pre-IPOs carry a mystique that draws investors in, promising access to “the next big thing.” But beneath the glitter, there are lessons—hard, sometimes painful lessons—that every independent investor must take to heart.

I want to share a few of those experiences here. Not as sensational stories, but as windows into the psychology of markets, the interplay between narrative and numbers, and the discipline it takes to survive cycles of hype and disillusion.

The Allure of the IPO Dream

The first IPO I ever tracked closely was back in the late 2000s. A small biotech firm with an unproven treatment promised to revolutionize patient care. The roadshow materials were glossy, the executives polished, and the underwriters projected valuations that seemed untethered from reality.

As I sat among institutional investors, I noticed two reactions. The seasoned analysts asked about burn rate, trial data, and regulatory hurdles. The retail sentiment outside that room was different—forums buzzed with certainty that this company would be “the next Genentech.”

The stock soared on day one, but within a year, it had lost more than 70% of its value. That was my first taste of the IPO paradox: the excitement of access versus the cold discipline of financial truth.

Independent investors often forget that IPOs are not charity events; they are exits. Early insiders, venture capitalists, and sometimes founders are cashing out. What you’re buying into is not just growth—it’s the transfer of risk.

Pre-IPO Opportunities: Gold or Mirage?

In the 2010s, I began seeing more Pre-IPO opportunities offered to high-net-worth clients. These were pitched as exclusive chances to enter before the masses, at a valuation that would surely be dwarfed once the bell rang on Wall Street.

One deal I remember vividly was in 2019. A tech platform with a charismatic founder was raising its final private round. The pitch was irresistible: user growth charts bending upward, testimonials from brand-name partners, and the promise of an IPO within 18 months. I watched investors scramble to commit capital, many stretching their personal liquidity to participate.

But the company’s fundamentals were flawed. Its customer acquisition costs were unsustainable, and profitability was a distant dream. By 2022, when the IPO window closed due to macro tightening and inflation fears, the valuation collapsed in secondary markets. Those “exclusive” investors were left holding illiquid shares, waiting for a liquidity event that never came.

Not all Pre-IPOs end badly. I’ve seen disciplined deals deliver tenfold returns. But here’s the truth: for every success story like Alibaba or Moderna, there are dozens of forgotten names. Survivorship bias makes us hear the winners louder than the losers.

Block Trades: The Quiet Side of Liquidity

In 2023, I witnessed a block trade in a mid-cap energy firm. A large institutional holder wanted out, and quickly. The discount offered was steep, and independent investors—those watching the tape—saw a sudden dip and smelled “opportunity.”

But block trades are rarely accidents. They reflect a mismatch between liquidity needs and market appetite. That trade was a signal, not a gift. Within weeks, the company issued weak earnings guidance, and the stock drifted lower. Those who piled in during the discount learned the hard way that price is not the same as value.

Block trades remind me of poker: sometimes the other player is folding for reasons you don’t yet see.

Euphoria and Reality Checks

The most powerful example of collective euphoria I’ve seen in recent years was the SPAC boom of 2020–2021. Companies with little more than a pitch deck went public at billion-dollar valuations. Social media amplified every rumor, every celebrity endorsement, every supposed disruption.

I remember analyzing one electric vehicle startup in 2021. The promise was bold: “redefining mobility for the next century.” Investors, desperate for the next Tesla, poured in. But when I looked at the filings, production targets were aspirational at best. By late 2022, lawsuits, regulatory probes, and missed milestones turned that euphoria into disillusion.

Cycles like this repeat. Dot-coms in the late 1990s. Housing in 2005–2007. SPACs in 2021. The pattern is always the same: optimism outpaces reality, and reality eventually reclaims its place.

What Independent Investors Must Learn

So what do I tell the independent investors I mentor? Three simple but hard truths:

Read beyond the roadshow. If the glossy deck looks perfect, assume it’s designed to distract you from the cracks. Dig into the filings, ask uncomfortable questions, and verify growth claims.
Valuation is not destiny. A $20 billion private valuation means little if the path to profitability is unclear. Numbers are narratives until they are backed by cash flow.
Liquidity is a privilege. IPOs and block trades are liquidity events—for others. Don’t forget whose exit you are financing.
Set exit strategies. Don’t enter a Pre-IPO or hot IPO without knowing your exit. Will you hold for five years, or sell on day one? Hope is not a strategy.
Beware the crowd. When everyone says, “This can’t fail,” step back. Markets are collective psychology, and psychology is prone to extremes.

Conclusion: Behind the Curtain

Every IPO, every Pre-IPO, every block trade I’ve studied has been less about numbers and more about human behavior. Ambition, fear, greed, and hope—these drive valuations more than spreadsheets do.

As independent investors, our edge is not speed or scale, but perspective. We can afford to be patient, skeptical, and disciplined. The market will always tell dazzling stories. Our job is to listen, but never to suspend judgment.

Behind the curtain, the truth is rarely as glamorous as the brochure. But if you can hold onto discipline while others chase dreams, you give yourself the rarest advantage of all—longevity in the markets.