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Websites give buyers chance to invest in a company before IPO

If you’re dying to invest in a popular private company such as Facebook, LinkedIn or Twitter, you might not need to grow old waiting for an IPO.

Such private companies are usually off limits for regular investors. But a number of financial websites are letting investors buy pieces of companies from owners or employees of private companies, almost as they might buy an old bike on Craigslist.

These online marketplaces, such as SharesPost, SecondMarket and XChange, give investors an early grab at companies before they do an initial public offering. The services also let entrepreneurs or venture capital firms sell their shares to raise cash.

Such marketplaces fill a need since the IPO market is gummed up, says Francis Gaskins of IPOdesktop. "There’s a market for owners who want to diversify and (investors) who just want to speculate."

By Matt Krantz, USA TODAY

Full Story: http://www.usatoday.com/money/markets/2009-07-20-invest-ipo_N.htm

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