For many investors, it is not possible to get access to private funding rounds and secondary market transactions in companies like Anthropic, and so they have remained the preserve of private equity funds and institutions with direct market access.
The result is a familiar pattern: investors watch the IPO from the sidelines, then access the company at or after listing - at a different entry point.
21shares has set out to create exchange-traded products that address this access gap directly. They are creating exchange-traded products to offer investors listed exposure to pre-IPO companies - without requiring participation in private placements, venture fund structures, or illiquid secondary platforms.
Pre-IPO ETPs hold perpetual futures, not shares
Let us use the example of Anthropic. A pre-IPO ETP would not hold Anthropic shares, and it is not structured to provide ownership rights in Anthropic. What it provides is synthetic exposure to Anthropic's current market-implied valuation, achieved through a defined derivative structure.
The product operates via notes issued by FalconX Group (21shares’ parent company, and one of the world’s leading institutional digital asset prime brokerages), which acts as the counterparty and manages the underlying exposure through perpetual futures contracts traded on Binance and Hyperliquid. The use of a note structure allows the ETP to hold a single, defined instrument, the FalconX note, while the economic exposure to Anthropic is managed at the counterparty level through the futures positions.
Perpetual futures are the instrument of choice here because they solve a structural problem specific to pre-IPO assets: there is no liquid spot market yet. A standard futures contract with an expiration date would require rolling and would carry roll-cost risk. Perpetual contracts have no expiration date. They trade continuously and maintain price alignment with their reference asset through a funding rate mechanism, a periodic payment exchanged between long and short positions that keeps the futures price anchored to the underlying reference price.
The funding rate is the primary variable cost and reflects live market conditions
Because perpetual futures maintain their peg to the reference price through a funding mechanism rather than through convergence at expiration, the funding rate is a live economic variable that affects returns. When long positioning dominates, long holders pay a funding fee to short holders. This cost is not a management fee; it is an intrinsic characteristic of the derivative instrument.
These funding costs pass through to the Net Asset Value (NAV). Investors should treat this as a variable ongoing cost that reflects market conditions and positioning. This is a structural characteristic of all perpetual futures-based products.
After IPO, the ETP continues trading without forced settlement or share conversion
One question investors will rightly ask is what happens when the company has IPO’d and has a public listing. The ETP is not structured to physically convert to public equity at the point of IPO. Post-listing, FalconX's perpetual futures positions will continue to operate, but the oracle reference price will transition from private market valuations and secondary transaction data to Anthropic's official exchange-quoted spot price.
This design choice has a practical advantage: it avoids the complexity of forced settlement, share custody, and cross-jurisdictional equity ownership that a physical conversion would require. It also means the product can continue to trade without interruption across the IPO event.
Pre-IPO ETPs create a new category of listed access to private market valuations
What the 21shares pre-IPO ETPs represent is a proof of concept for a new category of listed instruments. The combination of perpetual futures, oracle infrastructure, and ETP wrapper creates a pathway for translating private market valuations into exchange-listed products accessible to more investors.
As private markets continue to grow in scale and significance, and as investors face increasing pressure to capture returns earlier in a company's development cycle, the demand for listed access to pre-IPO valuations is likely to expand. The structural architecture deployed here, oracle-priced perpetual futures intermediated through a note counterparty and wrapped in an ETP, is one answer to that demand.
FAQ
What is a pre-IPO ETP and how does it work?
A pre-IPO ETP is an exchange-traded product that gives investors listed exposure to a private company's current market-implied valuation before that company has completed an initial public offering (IPO). Rather than holding shares in the company, the ETP provides synthetic exposure through derivative instruments such as perpetual futures contracts. Investors can buy and sell the ETP through a standard brokerage account, without accessing private placements or illiquid secondary markets.
Does a pre-IPO ETP mean I own shares in the company?
No. A pre-IPO ETP does not hold shares in the underlying company and does not confer ownership rights. The product provides synthetic exposure to the company's market-implied valuation through perpetual futures contracts. Investors who want direct equity ownership would need to participate in private funding rounds or purchase through secondary market platforms directly.
How is the price of a pre-IPO ETP determined when the company is not publicly listed?
In the absence of a public listing, a pre-IPO ETP's valuation comes from specialist trading venues that allow the market to continuously express a view on a private company’s valuation. For 21shares’ pre-IPO ETPs, Binance is used for price discovery and is driven directly by executed market activity. Its proprietary methodology calculates the mark price second-by-second using a rolling average of executed transactions, with safeguards designed to manage volatility and periods of lower liquidity.
What is the funding rate and how does it affect my returns?
Perpetual futures contracts maintain price alignment with a reference asset through a funding rate: a periodic payment exchanged between long and short holders. When more investors hold long positions than short, long holders pay a fee to short holders. This is a structural characteristic of all perpetual futures-based products.This cost passes through to the ETP's Net Asset Value (NAV) and reduces returns for long-position holders. The funding rate is variable and changes with market conditions.
What happens to a pre-IPO ETP after the company's IPO?
When the underlying company completes its IPO and receives a public listing, the ETP does not convert to physical equity. The perpetual futures structure continues to operate, but the reference price transitions from private market valuations and secondary transaction data to the company's official exchange-quoted spot price. This design allows the ETP to continue trading without interruption across the IPO event, without requiring forced settlement or cross-jurisdictional share conversion.
Where would the products be listed?
At the time of writing, 21shares pre-IPO ETPs will be traded on Wiener Börse (also known as the Vienna Stock Exchange) and available through connected investment platforms.
