Attendees at the the OpenAI DevDay conference last month in September. Investors are closely watching for an IPO by the ChatGPT owner.Jeff Chiu/The Associated Press
Online trading platform Questrade Financial Group Inc. is offering some of its clients the ability to buy a stake in OpenAI long before the artificial intelligence behemoth is set to go public.
Starting on Tuesday, Questrade will give eligible Canadian investors access to a fund tied to private shares of OpenAI, the company behind ChatGPT and one of the world’s most closely watched private technology giants. The offering, which will run for a limited time, requires a minimum investment of US$5,000 and is available only to accredited investors who meet certain income or asset thresholds.
The move is the latest in a push by Canadian online brokerages to give investors earlier exposure to sought-after companies.
In May, for example, Wealthsimple introduced an IPO access product that allows everyday investors to buy shares in select companies through initial public offerings, or IPOs, shortly before their shares begin trading on stock exchanges.
In August, Questrade began offering qualifying investors the ability to invest in buzzy companies even earlier – months, or potentially years, before they plan to go public.
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Online brokerages are billing IPO and pre-IPO access as an opportunity for small investors to get past the velvet ropes and acquire a stake in rapidly growing companies at an early stage, something that has traditionally been available only to wealthy individuals and institutional investors.
But some experts warn that getting in early comes with significant risks, including uncertain valuations, limited opportunities to sell and the possibility that a company will never actually go public.
Earlier this year, Questrade provided investors pre-IPO access to payment company Stripe and prediction-market platform Polymarket. (Both opportunities have now closed.) The brokerage says it is the first self-directed brokerage in Canada to offer this type of access to individual private companies.
Unlike when they’re buying stocks in a publicly traded company, Questrade clients won’t be able to purchase OpenAI shares directly. Instead, they will buy units in a dedicated investment fund tied to the company’s private shares.
If OpenAI eventually goes public, investors will receive the value of the investment in their accounts after any applicable lock-up period, Questrade said.
Access will be reserved for accredited investors, a regulatory category generally reserved for individuals who meet certain income or asset thresholds. To qualify, investors must have earned more than $200,000 a year before taxes, or $300,000 combined with a spouse, for the past two years and expect to earn the same this year. Alternatively, they must have more than $1-million in financial assets, such as cash and investments, either on their own or with a spouse, after subtracting any related debts.
The fund offers investors exposure to OpenAI at a valuation of US$1.4-trillion, according to Questrade.
For investors, getting in before an IPO is a chance to benefit from a company’s growth before its shares become available to the broader public, said Hwan Kim, Questrade’s chief product officer, in an interview.
“More companies are staying private much longer than before,” Mr. Kim said. “It’s often the case that the actual creation of value for those companies actually tends to happen before the IPO date.”
The average timeline for a U.S. company to reach IPO stage has more than doubled over the past 30 years, research shows. In 1996, the average age of a U.S. company going public was seven years, compared with 15 years in 2024, according to a study by Boston College law professor Renée Jones.
But investing early doesn’t guarantee a profit, particularly if a private company is already highly valued, said Simon Wong, a certified financial planner and head of financial planning at Blueprint Financial.
“You could be buying at the company that is essentially at the most expensive point in its private market history,” Mr. Wong said.
Early venture capital investors may have bought shares at a fraction of the valuation being offered to individual investors today, he added.
Determining whether a private company is fairly valued can also be difficult, Mr. Wong said. Unlike publicly traded companies, which must regularly disclose financial information, private enterprises generally provide investors with far less transparency.
Pre-IPO investments can also be considerably harder to sell. “Even after an IPO, there still can be contract lockups or other resale restrictions that may apply,” he said.
Mr. Kim said Questrade may help arrange secondary sales if investors want to exit their positions before an IPO, but those transactions would depend on finding willing buyers.