5 ways outsiders can buy a hot IPO

Related topics: stocks, IPO, mutual funds, investing strategy, ETFLinked In (LNKD, news) shares more than doubled in value for the lucky stiffs who were part of the Silicon Valley company's May 20 initial public offering.Unfortunately, regular investors were left out of the biggest Internet IPO since the debut of Google (GOOG, news) in 2004.That's the cold reality of IPOs. Unless you know someone at the company or have a great investing network with bigwigs on speed dial, you'll have a hard time sharing in the initial splash of companies like Linked In.Check out MSN Money's IPO Center Still, it's hard not to wonder what it would take to share in the action the next time around -- say, when the $750 million IPO Groupon filed plans for on June 2 hits the market. IPO news The good news is that even if you can't participate in the initial offering, there are options. Yes, some require a big bank account, but others allow even small-time investors to share in the process of taking the hottest companies into the public markets.If you were salivating over Linked In and are even more excited over the prospect of an inevitable Facebook IPO, here are five options you may do well to consider:Buy from investment bankers A company going public hires financial advisers to structure the transaction, and if you go right to these money runners, you can get in on the offering. The gatekeepers are plainly listed in a company's IPO prospectus, publicly available on the Securities and Exchange Commission's EDGAR database.For instance, Linked In's investment banks included Morgan Stanley (MS, news), Merrill Lynch and JP Morgan Chase (JPM, news). Unfortunately, these bankers won't give you the time of day unless you make it worth their while with a serious chunk of cash.What's more, even if you can come up with a few hundred Rosetta Stone Cheap grand, it's an awfully risky bet to dump that big a chunk into a single company.Buy on secondary markets Over the past few years, new markets like Shares Post and Second Market have emerged to trade private company shares. And recently there has been a push to ease regulations and make this market even more accessible.You could have bought Linked In shares on just this kind of exchange before the IPO. But the catch, again, is money. You'll probably have to have north of $100,000, considering the small initial supply of these shares.There's also a time element to consider because of the legal hurdles and regulations involved with a private stock investment. So if you want to get into Facebook or another hot IPO on the secondary market, you'd better do your homework, and sooner rather than later.Invest in IPO-focused funds Consider pooling your buying power with other investors. There are a number of mutual funds and exchange-traded funds that focus specifically on the profit potential of the IPO scene.Take the Global IPO Plus Aftermarket (IPOSX)fund. The fund's managers at Renaissance Capital are old hands in the IPO scene, providing research services to institutions.

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