The Best Way to Invest in SpaceX Before Its IPO

News of the upcoming initial public offering (IPO) of SpaceX has lit up the investing community. Unusually, it is expected that some ordinary retail investors will be able to buy in at the offering price, though those shares will be hard to come by. But some are interested in getting exposure to the company even before it goes public.

Private equity firms often provide seed money to growing companies in exchange for partial ownership. If those companies successfully go public later, that gives those firms an easy way to sell their stakes on the open market and realize their gains. But early access to potentially lucrative investments is why private equity funds have become a popular way to invest recently.

If you're looking for early portfolio exposure to SpaceX, though, I think there's a better way to do it.

Why it may not be a good idea

There can be advantages to investing in companies while they are still private. Such companies are often younger and more speculative, and need investor dollars to grow themselves into the kinds of businesses that stock investors will value. The hope is that by the time they IPO, their values will have soared, and that they'll skyrocket further afterward, earning early investors who took a chance on them a bundle. However, that is not always the case.

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Some funds that invest in private equity are interval funds, which means you can only sell shares and withdraw your money at certain times. That's risky, since you don't always have access to your investments, and can't respond as rapidly as you might want to respond to changing circumstances.

Other private equity funds invest in a range of companies. So, while you might be interested in SpaceX specifically, getting access to it by putting your money into such a fund means you're also getting a large assortment of other investments that you might not have picked. That kind of diversification is viewed as an advantage by many investors, but you should make sure you're acquainted with all the companies in the fund. Some of them may be riskier bets than you're comfortable with.

These funds also often charge their shareholders high fees.

How to get exposure to SpaceX pre-IPO

If you want portfolio exposure to SpaceX now with more security, my vote is to invest in Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL). Alphabet invested $900 million in SpaceX in 2015, and with the latter's rapid growth and leadership position in rocket launching, as well as its Starlink broadband business, that stake has increased massively in value.

Various other funding rounds diluted its stake a bit, but according to Bloomberg, Alphabet still owned 6.1% of SpaceX as of the end of 2025. If it ends up going public at a valuation of close to $2 trillion, as it's hoping to, Alphabet's stake would be worth more than $100 billion -- more than 110 times what it paid for it.

Alphabet owns many businesses, including Android, YouTube, and Google Search, which accounts for 90% of internet searches. It's still growing quickly, too: Sales increased 22% year over year in the first quarter, with a 63% increase in cloud sales.

Its industry-leading segments provide safety and reliability, and it's an excellent growth pick for any investor, which is why it's the best way to invest in SpaceX for now.

Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet. The Motley Fool has a disclosure policy.