SoFi to give amateur investors early access to IPOs in break from Wall Street tradition

SoFi to give amateur investors early access to IPOs in break from Wall Street tradition

Online finance start-up SoFi is lowering the barrier for amateur investors to buy shares of companies as they go public.

These IPO shares have historically been set aside for Wall Street's institutional investors, or high-net worth individuals. Retail traders don't have a way to buy into newly listed companies until those shares begin actually trading on the exchange. By that time, the price has often gapped higher.

"Main Street will have access to investing in a way they wouldn't have before," CEO Anthony Noto said in a phone interview. "It gives more differentiation, and more access so people can build diversified portfolios."

SoFi itself will be an underwriter in these deals, meaning it works with companies to determine a share price, buys securities from the issuer then sell those back to certain investors. It's common for brokerage firms to get a portion of IPO shares in that process. But they don't typically offer those to the everyday investor.

Noto worked on more than 50 IPOs, including Twitter's, in his former role as partner and head of the technology media and telecom group at Goldman Sachs. Firms like Goldman generate revenue from Wall Street funds, who often choose to get in on an IPO "based