The conversation usually starts the same way. "How do I get exposure to SpaceX?" The honest answer is more interesting than most people expect — because the structure of the private market has changed, and the menu of options is wider, more complicated, and more important to understand than it was a decade ago.

Introduction

For most of modern market history, by the time a company became a household name, you could buy it on a public exchange. That has fundamentally changed. The largest, most strategically significant private companies — SpaceX, Stripe, Anthropic, OpenAI, Databricks, and others — are remaining private well past the stage at which previous generations of comparable companies went public. SpaceX is the most frequently named example in client conversations, and for understandable reasons. It generates clear cash flow today through Starlink and its launch business, has a long-horizon strategic vision, and represents the kind of category-defining business that most investors would have expected to be public years ago.

This paper explains what's actually possible if you want exposure to SpaceX or to the broader private-company landscape, what the trade-offs are between the available paths, and why the structural shift toward staying private matters for how you think about portfolio construction going forward.

Q: Why is SpaceX the company that keeps coming up in these conversations?

SpaceX has become the default starting point for these conversations because of a combination of fundamentals and narrative that few private companies share. The launch business has effectively no peer at scale — SpaceX is responsible for the dominant share of global commercial launches, and the technical lead is wide enough that competitors will spend years catching up to where SpaceX is today, by which point SpaceX will have moved further. That's a real economic moat, not a marketing one.

Starlink is the more important economic story. The constellation is operationally complex in ways that are difficult to replicate, the customer base is growing across consumer, enterprise, maritime, aviation, and government segments, and the revenue trajectory has moved from speculative to material. The cash flow profile has shifted enough that it now anchors a serious investment case independent of any longer-horizon ambitions.

Beyond those two pillars, the optionality is significant. The longer-horizon vision — including the path to Mars — requires enormous capital, but the runway is clearer than it has ever been because the launch and Starlink businesses generate the cash to fund it. The AI and robotics applications across the broader Musk-affiliated ecosystem add a layer of strategic value that's harder to model but real. And there's a sentiment factor that shouldn't be ignored: when a top-ten globally recognized company eventually goes public, the buzz alone tends to create momentum at the gate. None of that is a guarantee, but the fundamentals underneath the narrative are unusually solid for a private-stage company.

Q: Why are companies like SpaceX staying private so much longer than they used to?

The honest answer is that staying private is now strategically attractive in ways it wasn't twenty years ago, and the capital markets have made it operationally feasible. The motivation is largely about flexibility — being able to make management decisions, allocate capital, and pivot strategically without the operational drag of quarterly earnings cycles, the regulatory cost of being public, the constant disclosure requirements, and the activist or short-seller pressure that comes with a public listing. For a company executing a long-horizon strategy, that flexibility is genuinely valuable.

What changed is that capital availability finally caught up with that preference. Twenty years ago, even companies that wanted to stay private couldn't, because there wasn't enough late-stage growth capital to fund them at scale. Today there is. Sovereign wealth funds, mega-cap venture firms, crossover funds, and dedicated private growth capital pools have made it possible to raise hundreds of millions or billions in private rounds at valuations that rival or exceed what the public markets would offer. The result is that companies can stay private at scale that previously would have forced them onto an exchange.

The downstream effect for investors is significant. The pre-IPO phase used to be measured in years; for the largest private companies it's now often measured in decades. A meaningful share of equity value creation is happening before the IPO rather than after, and an investor who waits for the public listing is showing up to a different game than they would have a generation ago.

Q: What does that shift mean for how I should think about my portfolio?

If a meaningful share of long-term equity value creation is happening in the private market before companies ever list, then a portfolio built entirely from public market holdings is, structurally, missing a slice of the opportunity set. That doesn't mean every investor needs private exposure, and it doesn't mean private exposure is appropriate at any size. But it does mean the question is worth asking deliberately rather than defaulting to "I'll buy it when it's public."

The counterweight is that private exposure carries real costs that public exposure does not — illiquidity, lower transparency, complex tax characteristics, structural fees, and in many cases significant minimum investment thresholds. Whether the trade-off is worth it depends on your time horizon, your liquidity needs, your overall portfolio size, and how concentrated you already are in equity-correlated risk through other holdings.

The most useful framing is to think of pre-IPO exposure as a category that earns its place by what it adds — early access to the value creation phase of category-defining companies — rather than as a substitute for diversified public market exposure.

Q: What are the actual ways to get pre-IPO exposure today?

There are four practical paths, and each has a meaningfully different risk, liquidity, and accessibility profile. They are not interchangeable. Understanding which one fits your situation is more important than the underlying allocation question.

Table 1: Four Paths to Pre-IPO Exposure

Each of these is doing something different, and the right path depends on what you're optimizing for.

Q: How does a publicly traded mutual fund get private-company exposure, and what are the trade-offs?

A small but growing category of publicly traded mutual funds and ETFs holds direct equity stakes in private companies as part of an otherwise diversified portfolio of public stocks. The structure works because mutual funds are permitted to hold a limited percentage of their assets in illiquid securities, which includes pre-IPO private equity. A fund manager can build a position in a company like SpaceX through secondary purchases or direct investment rounds, and that position then becomes part of the fund's daily-priced, liquid portfolio.

The advantages of this structure are meaningful. The fund itself trades at its net asset value with daily liquidity — you can buy or sell on any market day, just like any other mutual fund. The minimum investment is typically just the standard fund minimum, which makes it accessible to investors who would never qualify for a direct private placement. And because the private holding is one position within a broader portfolio of large-cap public stocks, the volatility of the private mark is dampened by the public side of the book.

The trade-offs are equally real. The exposure to any single private name is small — typically a few percent of the fund — so even if SpaceX represents the largest private holding, your effective exposure as a percentage of your total portfolio is correspondingly small. You can't isolate the position; you're buying the entire fund's strategy. And the private holdings are valued through a fair-value process rather than a market price, which means the marks update on their own cadence rather than continuously.

For investors who want some private exposure without the lockup, minimum, or accreditation requirements of direct paths, this category is one of the only practical entry points. We use this category in client portfolios in modest allocations because it delivers liquid, diversified equity exposure while incidentally providing access to a slice of the private market that would otherwise be off-limits to most investors.

Q: What about closed-end funds that focus specifically on private companies?

A separate category of public funds is structured as closed-end vehicles that hold concentrated portfolios of private growth companies. These trade on exchanges, which provides a form of liquidity, but they often trade at significant premiums or discounts to their underlying net asset value. That premium-discount dynamic can be either an advantage or a serious drag depending on the entry point.

The appeal is concentration — these funds are explicitly trying to deliver private-company exposure as their core strategy, so the private allocation is much higher than what you'd get in a general mutual fund. The risk is that price and value can diverge meaningfully. A fund trading at a 30% premium to its NAV is a different proposition than the same fund trading at a 20% discount, even if the underlying holdings are identical. Investors entering at premium prices have, historically, often experienced the premium evaporate over time.

These can play a role for investors who want concentrated private exposure with at least nominal liquidity, but they require careful attention to the relationship between price and underlying value at the time of entry.

Q: What about buying private shares directly on a secondary platform?

Several platforms — Forge, Hiive, EquityZen, and others — facilitate secondary transactions in private company shares between qualified buyers and existing shareholders, typically employees or early investors who want liquidity. For an accredited investor with the capital to participate, this is the most direct way to gain exposure to a specific private company at a specific price.

The trade-offs are substantial and worth understanding before pursuing this path. Minimums are typically $250,000 or higher per transaction, often in the $500,000–$1,000,000 range for the most sought-after names. You're buying at a single point-in-time price that may or may not represent good value relative to the company's eventual outcome. The shares are fully illiquid — there is no exit mechanism until the company goes public, gets acquired, or runs another tender. And in many cases, the company itself has rights of first refusal on the transfer, which can complicate or block the trade.

Tax treatment of direct private holdings is also more complex. Holding period rules matter for long-term capital gains qualification, and certain categories of private stock may qualify for QSBS treatment if specific conditions are met — which can substantially reduce or eliminate federal tax on a portion of the gain. The QSBS analysis is highly specific to the issuing company, the date of issuance, and the holder's holding period, and should be confirmed with a tax advisor before assuming it applies.

For an accredited investor with an appropriate portfolio size and a high tolerance for illiquidity, direct secondary purchases can be the right structure for committed exposure to a specific company. For most investors, the minimums alone make this path inaccessible.

Q: What about pre-IPO SPVs and venture funds?

Special purpose vehicles and dedicated late-stage venture funds are the institutional path to private exposure. An SPV pools capital from multiple investors to acquire a position in a specific company, while a fund holds positions across multiple private companies and is managed by the firm sponsoring it.

These vehicles typically require qualified purchaser status, which generally means $5 million or more in investments, and they carry standard private fund economics — management fees of 1–2% annually and a 20% performance fee on the gains. The capital is locked up for the life of the fund, which is generally 7–10 years and can be extended.

For investors who meet the threshold and have the appropriate portfolio size to absorb the lockup, these vehicles offer broader diversification across the private growth space than a single-company secondary purchase, professional sourcing and due diligence, and access to allocations that aren't available in any other format. For investors below the qualified purchaser threshold, this path simply isn't available.

Q: What does the liquidity picture really look like across these paths?

Liquidity is the single most under-examined consideration in private exposure decisions, and it varies dramatically across the paths above.

Table 2: Liquidity by Structure

The liquidity question is rarely treated with the seriousness it deserves. Investors often assume they can exit a private position when they need to. With the mutual fund and ETF route, that's broadly true. With the other three, it usually isn't. Capital that goes into a secondary purchase or an SPV needs to be capital you genuinely don't need access to for a long time, under any reasonable scenario, including life events you haven't planned for.

Q: How should I think about taxes across these structures?

Tax treatment varies meaningfully by structure, and the right path for one investor may not be the right path for another based purely on tax characteristics.

Mutual funds and ETFs that hold private positions are taxed like any other registered fund. Distributions are taxed as ordinary or qualified dividends depending on character, and capital gains apply on sale of the fund shares. Nothing about the underlying private holding changes the treatment at the investor level. This is the simplest tax profile of any of the paths.

Closed-end funds follow the same general framework as mutual funds, with the additional complexity that capital gain or loss at sale is measured against your purchase price, which may have included a premium that the market subsequently eliminated.

Direct private secondary purchases create the most complex tax picture, but also the most potential for favorable treatment. The holding period for long-term capital gains starts on the purchase date. If the shares meet the requirements for Qualified Small Business Stock — issued by a domestic C-corporation with gross assets under the QSBS threshold at issuance, held for at least five years, and a few other conditions — a substantial portion of the gain may be excluded from federal tax entirely. Whether QSBS applies depends on facts specific to the company and the holder, and should be confirmed with a tax advisor before assuming it does.

SPVs and venture funds typically pass through their tax characteristics to investors as partnership distributions, which can include ordinary income, capital gains, and various other items reported on a K-1. The tax complexity is real, and most investors in these structures should expect their tax preparation to become noticeably more involved.

Q: How much pre-IPO exposure makes sense in a portfolio?

There's no universal answer, but there are useful framing principles. Private exposure should be sized as a satellite holding, not a core one. The illiquidity, valuation uncertainty, and concentration risks are real, and they don't disappear no matter which structure you use to access the asset class. For investors with substantial portfolios, a modest allocation in the low single digits to high single digits, deployed through whichever structure fits the investor's accreditation status and liquidity needs, is a typical framing — though the right number for any individual depends on a careful look at total portfolio composition, time horizon, and existing equity-correlated risk through public stocks, employer stock, and other holdings.

The investor who already holds significant concentrated employer equity in a public tech company should think carefully about whether layering on private tech exposure is genuine diversification or just doubling down on the same correlated risk. The investor with a more balanced public portfolio and a long time horizon may have more room to add a modest private allocation without overweighting the same risk factor.

The size question deserves more thought than it usually gets. The structural question — which path — is often easier to answer than the sizing question.

Securities and Investment Advisory Services are offered through Osaic Wealth, Inc., member FINRA/SIPC. Osaic Wealth is separately owned and other entities and/or marketing names, products or services referenced here are independent of Osaic Wealth. Osaic Wealth does not offer tax or legal advice. Private investments involve significant risks including illiquidity, lack of dividends, loss of investment, and dilution. They are not suitable for all investors. This content is for informational purposes only and does not constitute investment advice or a solicitation to buy or sell any security. Accreditation and qualification requirements apply to certain investment structures. Past performance is not indicative of future results.