Author: 137Labs
When Mai Tong MSX announced its partnership with Republic to launch a dedicated Pre-IPO private equity tokenization platform for retail investors, a once-exclusive investment sector for top-tier institutions is being reopened.
In the past, ordinary investors could only buy in the secondary market after a company went public. Today, through the combination of tokenization technology and compliant channels, some are beginning to position themselves before the official IPO. Whether it’s SpaceX, the highest-valued private company globally, or AI giants like OpenAI, these are core targets in this trend.
This is not just a platform partnership news but a significant signal of the accelerated evolution of the Pre-IPO track.
1. Pre-IPO: The Stage of Truly Generating “Excess Returns”
In traditional finance, Pre-IPO refers to the final rounds of funding before a company goes public. At this stage, the company has usually completed product validation and business model refinement, with risks significantly lower than early-stage venture capital, but valuations have not yet been fully re-evaluated by the public markets.
Over the past 25 years, the private equity market has created far more value than the public stock markets during the same period, meaning much of the growth dividend has been realized before the company even lists. When companies enter the secondary market, early investors often lock in explosive returns.
Take SpaceX as an example: its private valuation has skyrocketed exponentially in just a few years. Similar situations are seen in leading AI, fintech, and crypto companies. The most rapid valuation jumps often occur during the pre-IPO phase.
The problem is, this stage has long been tightly controlled by PE, VC, and family offices.
2. Trillion-Scale but Highly Closed Market
Global unicorn valuations have reached hundreds of trillions of RMB, yet ordinary investors have almost no access to this market.
Traditional Pre-IPO investments face three major barriers:
1. High Capital Threshold
Entry amounts often require hundreds of thousands or even millions of dollars. The “qualified investor” standards exclude most retail investors.
2. Poor Liquidity
Funds are usually locked for years, with exits relying on IPOs or M&As, and a lack of effective secondary markets.
3. Information and Allocation Asymmetry
Popular targets like SpaceX, OpenAI, ByteDance, have high-quality shares mostly circulating among top-tier institutions.
Even with secondary private equity platforms like Forge or EquityZen in the US, they are essentially peer-to-peer matching, with low trading efficiency and opaque pricing mechanisms.
In other words, this is a large, potentially lucrative market with highly uneven access rules.
3. Traditional Brokerage Firms Experiment: The Signal from Robinhood
In June 2025, Robinhood, a major online brokerage, launched “stock tokens” of unlisted unicorns in Europe, including OpenAI and SpaceX.
This move sparked controversy. OpenAI quickly clarified that these tokens do not represent equity ownership; Elon Musk also joked about it on social media, further fueling the buzz.
Behind the controversy are two realities:
· There is genuine demand for on-chain Pre-IPO assets.
· Unlisted companies are highly sensitive to “pricing power spillover.”
Regardless of stance, this attempt sends a clear signal — tokenization of primary market assets is beginning to enter mainstream finance.
4. Three Paths for On-Chain Pre-IPO
As regulatory attitudes loosen and infrastructure matures, three typical models of on-chain Pre-IPO have emerged.
1. Derivative Model: Trading Valuations, Not Real Equity
Some projects do not hold actual shares but use perpetual contracts or index contracts, allowing users to bet on valuation changes of unlisted companies.
Platforms on Solana and other high-performance chains enable users to go long or short on “OpenAI valuation index.” This approach has low barriers and flexible liquidity design but issues include:
· Dependence on oracles for pricing
· Low frequency of private company valuation updates
· Regulatory gray areas
Essentially, this resembles prediction markets more than equity investments.
2. 1:1 Real Equity Tokenization (SPV Model)
This model involves establishing Special Purpose Vehicles (SPVs) that hold actual shares and issue proportional on-chain tokens.
Representative platforms include PreStocks related to Republic and Jarsy developed by a US team. Their core logic is:
· Raise funds first
· Negotiate with original shareholders to acquire shares
· Mint tokens proportional to actual holdings
Advantages include tangible assets backing the tokens and investors enjoying economic rights. Disadvantages are slow expansion, heavy reliance on offline resources, and significant compliance pressures.
3. Company-Led On-Chain Issuance (Issuer Model)
A more disruptive path is for companies themselves to become issuers.
Platforms like Opening Bell by Superstate attempt to enable companies to directly issue legally compliant stock tokens on-chain, with on-chain shareholder registers.
This could allow some companies to bypass traditional IPO processes and achieve quasi-public trading on-chain.
If regulators eventually recognize this model, the structure of capital markets could be fundamentally reshaped.
5. MSX × Republic: Structural Innovation within a Compliance Framework
Returning to the MSX and Republic partnership.
Republic operates under SEC regulation as a private securities platform with compliant issuance and custody systems, with underlying assets held by regulated entities. MSX collaborates with them to integrate:
· Compliant private equity
· SPV shareholding structures
· On-chain token issuance
· Trading mechanisms on the platform
This means MSX’s Pre-IPO zone is not just a “virtual mapping” but a structural innovation based on existing regulatory frameworks.
For ordinary investors, the main benefits are:
▻ Lower barriers
No longer requiring million-dollar entry tickets.
▻ Valuation pre-positioning
Avoiding emotional premiums during IPO hype.
▻ Liquidity exploration
Attempting to improve the long lock-up periods of traditional private placements through on-chain mechanisms.
6. Persistent Challenges
Despite promising prospects, on-chain Pre-IPO still faces three core issues:
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Regulatory boundaries are not yet fully clear.
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Unlisted companies have complex attitudes toward tokenization.
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Liquidity depth and pricing efficiency remain to be validated.
Especially for real equity models, expansion depends on offline resource integration, while derivative models must address information lag and manipulation risks.
On-chain Pre-IPO is not just a technical issue but a result of multiple negotiations among financial structures, regulatory systems, and corporate governance.
7. Democratization of Investment or New Risk Transfer?
Millennials and Generation Z are gradually becoming the main investment force, preferring to actively allocate high-growth assets rather than relying solely on pension systems. Unlisted tech giants naturally appeal to this demographic.
On-chain Pre-IPO, to some extent, narrows the opportunity gap between retail and institutional investors.
But we must also be clear:
· Limited disclosure from unlisted companies
· Valuations may significantly deviate from actual operations
· Weak liquidity could amplify volatility
Pre-IPO is never a low-risk investment; it simply involves a different risk structure.
Conclusion: Walls Are Starting to Erode
From Robinhood’s experimentation to Republic’s structured compliant issuance, and now MSX integrating Pre-IPO into its tokenization ecosystem, this track is rapidly maturing.
The once-impregnable walls of the primary market are beginning to crack.
In the future, capital markets may no longer strictly distinguish between “pre-IPO” and “post-IPO,” but instead realize continuous liquidity through on-chain assets.
When ordinary investors can participate via wallets in the growth of top-tier unlisted companies worldwide, what we see is not just a new product launch but a reconfiguration of capital structures.
The era of Pre-IPO may just be beginning.
