Pre-IPO fund refers to the exit mode of investing in an enterprise before it goes public or when it is expected that it can go public in the near future. Generally speaking, after an enterprise goes public, it sells its shares from the open capital market and withdraws. Different from venture capital in seed stage and initial stage, the investment time of the fund is that the scale and profit of the enterprise have reached the level of listing, and even the enterprise has stood at the door of the stock market. Therefore, the fund's investment has the advantages of low risk and quick recovery, and it can get a higher return on investment when the company's stock is highly praised by investors. In recent years, in the capital markets such as the United States, Europe and Hong Kong, there have been fund management companies focusing on investing in pre-listed enterprises. Large investment funds, such as Goldman Sachs and Morgan Stanley. In their portfolio, Pre-IPO investment is also an important part.

Recently, with the rapid expansion of IPO increment, Pre-IPO is regarded as a "more certain innovation", which is extremely hot in China, and its valuation once climbed to 20 times or even 30 times P/E ratio. He Xu believes that from the perspective of the new regulations, the regulatory authorities hope that through this reverse mechanism, investment institutions will pay more attention to the quality of enterprises, instead of relying solely on arbitrage in the primary and secondary markets to plug the gap in institutional arbitrage and guide long-term value investment. The release of the new regulations on the reduction of holdings will naturally lower the price of Pre-IPO projects, and the fiery Pre-IPO will also cool down.