Pre-IPO Investing's Real Problem Isn't Advisor Caution. It's Missing Infrastructure.

KPC Private Funds Co-Founder and CEO Dean Rubino joined host Mike Langford on The Modern Financial Advisor Podcast to explain why clients are chasing pre-IPO deals without their advisors, and what fiduciaries need before they can say yes.

Rubino, who has more than 25 years in private funds, including a stint as CEO and CIO of Hamilton Lane’s Richcourt Group, says an advisor’s hesitation is a reasonable response to a market that wasn’t built for fiduciaries.

Is the Market Built for Advisors?

Most pre-IPO vehicles were designed for retail buyers. Access has gone direct to the end investor, leaving advisors on the sidelines. Clients who hear about SpaceX or the next AI name on CNBC often don’t know which questions to ask, where fees may be hidden, or whether the vehicle owns what it says it owns.

Does the Investment Meet Fiduciary Standards?

Rubino says fiduciary-grade infrastructure comes down to three things:

• Custodial acceptance, so the investment appears on the client statement
• Reasonable assurance that the seller has the right to sell
• A diligence file that can hold up in a regulatory exam

He also stresses the details: Series D or Series E, common or preferred, and whether anti-dilution provisions apply. Knowing where you sit in the capital structure matters as much as knowing the purchase is real.

Is the Paperwork Sustainable?

A single private investment can come with 200-plus pages of documents. Five investments means five sets of signatures and e-signature envelopes, multiplied across every client. Since advisors typically keep about 90% of client assets in stocks, bonds, and ETFs, they can’t spend more than roughly 10% of their time on privates.

KPC’s platform treats each investor as a “fund of one.” Rubino says an advisor can build a customized allocation across hedge funds, private equity, pre-IPO stock, and co-investments with one set of documents, one e-signature envelope, and one consolidated K-1. KPC is an RIA, not a broker-dealer, and its client is the advisor.

Why Are Companies Staying Private Longer?

Rubino points to larger, more sophisticated private capital pools and secondary markets that give founders and employees liquidity without an IPO. In his view, much of the value creation that once happened after an IPO now happens before it.

“The complexity is not the investment itself. The complexity is how do you evaluate the investment.”

What This Signals

For advisors, the pre-IPO question is shifting from whether to engage to whether they have the custody, diligence, and operational setup to do it defensibly. For clients, direct access is arriving with or without their advisor.