Comments from Tim Keating of Keating Capital added to this update

BOSTON ( TheStreet) -- Let's be honest: For all the hype surrounding the Facebook IPO, chances are you and nobody you know is going to be able to get shares in the offering.

The sad truth about hot IPOs is that retail investors rarely get a chance to get in on the offering. With Facebook's initial public offering set to raise only $5 billion, compared to the social media giant's valuation of roughly $100 billion, it's a small slice of the pie that's being made available. That will make it extremely sought after when the company finally comes public, and retail investors will no doubt have the hardest time finding access.

"It's a supply and demand equation," explains Tim Keating, CEO of Keating Capital, which operates a closed-end fund dedicated to pre-IPO investments. "When you have an incredibly popular name like Facebook, there's a small allocation to retail."

Keating says that in a typical large IPO, 90% or more of the offering is allocated to institutional investors. For argument's sake, if the allocation is 10% for retail investors on a $5 billion IPO, that's only $500 million available for retail investors.

"That may be taken up by the underwriters' own clients," Keating points out. "If you're not a client, you're probably out of luck."

Goldman Sachs ( GS) already knows how popular the Facebook IPO will be. A year ago, Goldman caved to "intense media attention" and decided against a decision to offer Facebook shares to its U.S. clients. That came after reports the Goldman was requiring clients to make an investment of at least $2 million to get a stake in Facebook.

If you need a reminder of what the initial frenzy will be like, think back to when Google ( GOOG) first went public in 2004. Google offered only 19 million shares of common stock at $85 a share. The stock opened on its first day of trading, Aug. 19, at $100. Within a year, shares of Google tripled. By the end of 2005, shares were above $400.

With Facebook set to eclipse Google to become the largest Internet IPO in history, it stands to reason that Facebook shares will follow a similar trajectory to Google's stock, right? And that means investors who missed out on the IPO should think about buying shares as soon as they can get their hands on them, right? Well, not everyone is buying into the Facebook frenzy, at least not yet.

Ryan Jacob, CEO of Jacob Asset Management, is the portfolio manager of the Jacob Internet Fund ( JAMFX), which invests only in Internet and tech companies that Jacob thinks offer long-term opportunities. Despite have "Internet" in his fund's name, he's not immediately jumping on the Facebook bandwagon, noting an important lesson that is often forgotten by investors who buy into hype: Price does not equal value.

"You can't be completely blind to valuation, especially with an IPO," Jacob said Friday by phone from his office in New York. "We may own Facebook, but we may not own it right away. To be honest, there are some major Internet players we don't own, so we'll be taking a very close look at the IPO and then we'll make a decision."

Jacob points out that stocks are price to sell in IPOs. While that doesn't mean investors shouldn't buy any IPOs immediately, Jacob says it simply means investors must be careful in evaluating the investment. With so much hype and investor interest in Facebook, Jacob says investors will need to be extra cautious.

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