The Best Way For Retail Investors To Get A Piece Of Snap Before Its IPO

Snap Inc., owner of the Snapchat platform, is one of the most highly-anticipated Silicon Valley IPOs in recent memory. Snap officially filed for its IPO in late 2016, which valued the social media giant at roughly $25 billion.

Investors itching to get a piece of Snap at its IPO price are likely out of luck. Typically, it’s nearly impossible for retail investors to get in on IPO shares before they hit the market unless they have a connection at one of the underwriters.

Instead, investors must get creative if they want to buy shares before they begin trading on the big board. Equity crowdfunding platform Elite Crowdfunder is currently offering shares of privately-held Pinterest and previously offered shares of Uber as well. The site has a minimum investment limit of $25,000 per member.

When it comes to Snap, perhaps the best way for retail investors to invest ahead of the is to buy shares of other companies that already own a stake in Snap. Alphabet Inc GOOG GOOGL, Alibaba Group Holding Ltd BABA and Yahoo! Inc. YHOO all have small stakes in Snap.

Unfortunately, with market caps over $40 billion, the Snap investment is essentially negligible portion of the value of those three tech giants.

GSV Capital Corp GSVC is a close-end management investment company that focuses on privately-held tech companies. In its 2016 letter to shareholders, the company revealed a $4 million investment in Snap. According to its Q3 earnings report, GSV’s net assets totaled $223.6 million.  Assuming its Snap stake hasn’t depreciated in value since investment, Snap represents at least 1.7 percent of GSV’s portfolio.

A 1.7 percent stake is certainly far from a pure play. But with few other options available, GSV Capital may be the best way for retail investors to get a piece of Snap before the IPO.

Disclosure: The author is long BABA.