Tom rang me up last month, practically screaming into the phone. “Bro, I’m gonna get rich off the Stripe IPO,” he says. “Easy money, man.” Had to tell him straight up, You’re dreaming, buddy. It doesn’t work like that.
Nobody wants to admit this, but most of us regular people can’t actually buy IPO shares before they start trading. That’s the part everyone gets wrong. You hear these crazy stories about LinkedIn jumping 109% on the first day, or some tech startup making people millionaires overnight. Makes it sound simple, right? Wrong.
So I’m going to break down how to buy an IPO for real. No corporate jargon, no “please consult your financial advisor” garbage. Just the actual truth about what happens in 2025.
What’s an IPO Really About?
An IPO; that’s when a private company decides to sell shares to the public for the first time. Picture a family restaurant that’s been doing great, and suddenly they’re like, “Hey, anybody can own a piece now.”
Companies do this mostly for cash. They want to expand, build new stuff, or let their early investors finally cash out and buy that yacht they’ve been eyeing. When Discord or Stripe or whoever goes public, they’re opening the doors to everyone.
But here’s where it gets messy. Buying at the actual IPO price is completely different from buying once the stock’s already trading. Most people don’t get this difference, and that’s where the confusion starts.
Getting in Early? Yeah, Good Luck
Alright, straight talk time. If you’re wondering how to buy an IPO before it goes public, I’ve got bad news. You probably can’t. Sorry.
Here’s what really goes down. The company decides to go public – let’s say CoreWeave, which just listed in March. They hire these big investment banks. Goldman Sachs, Morgan Stanley, JP Morgan, the usual suspects. These banks’ whole job is finding people to buy the shares at the IPO price.
Who gets these shares? Their richest clients. Hedge funds, institutions, and people with millions sitting in their accounts. My buddy who works at Fidelity manages half a billion dollars, and even he can’t get into the really hot IPOs. If he’s getting shut out, what chance do you and I have?
There’s this whole system where brokers hand out shares to their VIP clients. Unless you’ve got serious money with them, and I’m talking serious money, you’re not on that list. It’s like trying to get into some exclusive nightclub without knowing the bouncer. Doesn’t matter how much you want in.
Now, there ARE a few ways regular folks can sometimes snag IPO shares. But I have to level with you – it’s rare, and there are no guarantees.
How Normal People Sometimes Get IPO Shares
Online Brokers That Offer IPO Access
Some platforms have started letting retail investors in on IPOs. Doesn’t mean you’ll actually get shares, though.
Robinhood‘s doing this now. Fidelity too. It works like this – they announce an upcoming IPO, you put in a request (the fancy term is “indication of interest”), and maybe, just maybe, you get some shares.
But check this out. If you ask for 100 shares, you might get 10. Or zero. Depends on how many shares the broker got and how many people want them. For how to buy an IPO online, this is probably your best shot. Just don’t expect miracles.
SoFi and Those Newer Platforms
SoFi‘s been advertising itself as the “IPOs for regular people” place. You don’t need millions in your account, which is cool. But again, getting shares isn’t automatic. You’re competing with thousands of other people for whatever scraps are available.
First Day Buying (What Most People Actually Do)
So you didn’t get an IPO allocation. Welcome to the club. Most folks end up buying shares on the actual first trading day anyway.
That’s what people mean when they search how to buy IPO stock on first day. Once trading starts – usually 9:30 AM Eastern – anyone with a brokerage account can buy shares like any other stock.
The IPO market’s been pretty wild in 2025. The third quarter saw 60 IPOs raising $14.6 billion. Biggest three-month stretch in four years. Figma went public, and StubHub went public. Stripe’s coming, Medline’s coming. Lots happening.
But here’s the catch with day-one buying. That IPO price everyone talks about? You’re not getting that price. That train left the station. You’re paying whatever the market says when you click buy.
Sometimes stocks go nuts. Circle, that crypto company, was priced at $31 in June. Opened at $69 the next morning. Jumped 56% in two days. If you got in at $31, you killed it. Bought at $69? Different story.
Other times, stocks tank. CoreWeave had a rough start even though it bounced back later. It’s a total crapshoot.
Actually Buying Shares Step by Step
Here’s the real process for how to buy IPO shares once trading starts:
Set Up Your Brokerage Account First
Do this before the IPO you want even announces a date. I’ve got Fidelity. My sister uses TD Ameritrade. My dad’s on Charles Schwab. Doesn’t really matter which one. Just get it set up and put money in it.
Track the IPO Calendar
IPOScoop, Renaissance Capital, your broker’s app – they all show upcoming IPOs. Set yourself reminders.
Actually Read About the Company
Yeah, I know. The prospectus is boring as hell. Read it anyway. Check what analysts say. Look at the numbers. Medline’s gonna be a $50 billion company selling 335,000 different medical products. That’s worth knowing about.
Be Ready at Market Open
IPOs go crazy on day one. Prices bounce all over the place. Use a limit order so you don’t accidentally pay double what you meant to.
Maybe Just Wait
Sounds weird after talking about getting in early, but hear me out. Lots of IPO stocks actually drop after the initial hype dies down. Waiting a few weeks or months can get you a better price.
The Stuff They Don’t Want You Thinking About
Let’s get real about IPO investment risks. This isn’t some guaranteed money maker.
These companies have zero history as public companies. You’re buying based on promises and projections. Blue Apron went public and crashed hard. Lyft’s been pretty disappointing. Not every IPO turns into Google.
There’s usually this “lock-up period” after IPOs – 90 to 180 days where insiders can’t sell their shares. When that ends, sometimes there’s this massive wave of selling that crushes the stock price. Seen it happen tons of times.
Also, IPO valuations can be totally ridiculous. When the market’s hot, companies price shares way higher than what makes sense. You might be buying something that’s already overpriced.
Should Beginners Even Mess with This?
If you’re new and searching for how to buy an IPO for beginners, real talk? Maybe start somewhere else.
IPOs are exciting. Reading about 100% gains gets your blood pumping. But they’re risky as hell, especially if you’re just starting out.
Before you jump into IPOs, ask yourself:
- Are you maxing out your 401(k)?
- Got an emergency fund?
- Own a mix of regular stocks or index funds?
If you said no to any of those, work on that first. IPOs will still be there when you’re ready.
But if you’ve got your basics covered and want to put a tiny bit – like 5% tops – into IPOs, go for it. Just don’t go all in.
What I Actually Do
Here’s my real strategy for how to buy an IPO:
- Stick with industries you get. Don’t understand Databricks’ data stuff or why Klarna’s payment thing matters? Skip it. Invest in businesses you actually understand.
- Put yourself on allocation lists. Probably won’t work, but worth a shot. Maybe you’ll get lucky someday.
- Wait for things to calm down. I know everyone’s talking about the hot new stock. But patience usually wins with IPOs. Let the craziness settle, see how the company actually does, then buy.
- Keep it small. Even if you love the company, don’t put more than a few percent of your money into any single IPO. Not worth the risk.
- Read everything. The S-1 filing, analyst reports, and what the skeptics say. The more you know, the smarter you’ll be.
What It All Means
That’s the actual story on how to buy an IPO. It’s not clicking a button and watching your money double. Getting IPO allocations before trading? Tough for regular folks. Buying the first day? Possible but risky. Waiting? Usually makes more sense.
The IPO market’s pretty active right now in 2025. Stripe’s valued at $106 billion and might list soon. Medline could hit a $50 billion valuation. Lots of big names coming.
Just don’t buy into the hype without doing homework. Remember Tom? He ended up waiting three months after Stripe goes public to buy. Got a better price than the IPO. Sometimes slow wins.
Whether you’re trying to figure out how to buy IPO shares, get in before public trading, or just understand how it works, the main thing is being realistic. Know what’s actually possible and what makes sense for you.
IPOs can be cool. They’re not some magic money machine, though. Just another investing tool; one that needs research, patience, and healthy skepticism about those “made a fortune on day one” stories.
Now you know what they don’t tell you. Go be smart about it.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investing in IPOs carries risk, and readers should conduct their own research or consult a licensed financial advisor before making investment decisions.