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Late Snap investors will need the IPO to pop for them to make money

Snap's late-stage private investors are counting on an IPO pop to cash in on their high-dollar investments.

Between February 2015 and May 2016, Snap raised $1.8 billion in 11 separate stock sales, according to the company's prospectus. Investors including Fidelity, T. Rowe Price and Coatue Management bought the shares for $15.36 each, on a split-adjusted basis, at a valuation of about $18 billion.

Snap said on Thursday that it plans to debut at $14 to $16 a share. At the mid-point of that range, those investors would be underwater.

Given what we know about IPOs, there's plenty of time to make money.

Bankers typically assess initial demand for the stock and then take a conservative approach to providing a price range. Often, the range is increased and, in particularly hot offerings, the stock will then price even higher.

That's all before the expected first-day rally.

Snap's current plans are to raise up to $3.68 billion at a valuation of as high as $18.5 billion. Previous reports said the company was looking for a valuation of closer to $25 billion.

But what matters most for existing investors is where the stock is trading in five months, when the lock-up period ends. Until then, insiders are just sitting on paper.