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."

The IPO market is anemic. Just 13 have been done through June and one in July, vs. 35 and 133 in the first six months of 2008 and 2007, Renaissance Capital says.

That's why some marketplaces claim to have a niche, although they have quirks, such as:

•Strict rules on who can buy. The sites require investors be "accredited," which rules out the typical person. The Securities and Exchange Commission says an accredited investor is a person with a net worth of $1 million or income of $200,000 a year either individually or $300,000 with a spouse.

•Fees that may be higher than other stock transactions. Each marketplace has different fees. SharesPost charges a $34-a-month subscription fee to be part of the system. Buyers and sellers then pay $2,500 to US Bank to complete the transactions. SecondMarket charges a 4% fee that's split between the buyer and seller. XChange now will pair buyers and sellers for free, but is working to get SEC approval to operate as an exchange, then will charge a 1% fee.

•Limited financial data. Investors may not have access to any audited financial information from the companies, making it hard to value the shares.