A family member works for a company which has filed for a somewhat anticipated IPO. The family member contacted me and asked about my interest in a Friends and Family purchase of shares at the offering price. Due to the relative high likelihood of this offering being successful (company is in a hot sector, shows large revenue growth over the past few years, and has a good amount of buzz surrounding the filing), I let him know that I am indeed interested. The level at which I would be allowed to participate is still TBD-- I have a number in mind that I am thinking to put into it, but I may or may not be able to buy that much depending on the IPO bank.
My current stock investments are all index funds. I have a three fund portfolio that matches my IPS, and I'm very happy with it. I don't intend to make single stock purchases a habit, and I would only put spending money that I could live with losing entirely into this. I won't be robbing Peter to pay Paul-- that is to say, I won't reduce my contributions to my established investments to "find" the money for this. I don't want to get too specific about the IPO terms, but the lockup is very favorable to friends and family-- think little to none.
Initial thoughts are to put $X in, and set a limit order to sell half the shares at about (x * 2). Get my own funds out, and then play with house money.
Thoughts on Friends and Family shares, the above strategy, or anything else that comes to mind?