How to Buy IPO Stock at Its Offer Price

Average investors tend to get left on the sidelines in favor of big funds when it comes to investing in initial public offerings at their offer price, which can often be considerably below where the stock ends up trading as time goes on. Only a small percentage of retail investors even know how to buy IPO stock at the company’s go-public price…

“It’s generally a mysterious process for the average American,” says Darren Marble, who as co-CEO of Crush Capital is aiming to democratize initial public offerings by bringing them to the masses with a reality TV show.

The show, called “Going Public,” will stream on and feature episodes of small companies attempting to raise money. Viewers can invest in the companies — via their computers, smart TVs or app-enabled devices — at the IPO price for their debut on the Nasdaq stock exchange.

These will be Regulation A+ IPOs — named for regulations from the Jumpstart Our Business Startups (JOBS) Act of 2012 that broadened the pool of eligible investors for private companies — and these offerings will be much smaller than many other IPOs.

It can be much more difficult for average investors to buy shares in a traditional IPO at the offer price so that they can take part in the potential run-up in share prices once the company goes public.

Why Are Traditional IPOs So Exclusive?

With traditional IPOs, companies that want to go public hire investment banks to sell shares.

The investment banks can team up to form syndicates, with each bank getting a certain number of shares. The banks offer the lion’s share to big institutional investors like pensions, endowments or hedge funds in what is called a “road show.” Retail brokerages can end up getting shares, but they may make up only 10% of the allotment.

Most IPOs are done this way, but there is another type of IPO that gives retail investors a better chance of getting shares, known as…

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