Roth IRA and pre-IPO shares

To be clear, only cash can be contributed to an IRA. What that IRA can invest in is up to the IRA custodian.

You can have a "self-directed" IRA that can invest in things like real estate, private stock, etc. But those assets cannot have a direct benefit to the IRA holder. You can't, for example, sell your house and re-buy it (at any price) within the IRA because you get a benefit from living in the house. You also can't buy rental property and collect the rents outside of the IRA - all profits must be kept inside the IRA, and any withdrawals would be subject to normal IRA distribution rules.

It's perfectly legal to buy pre-IPO stock within a Roth IRA, so long as the transaction is independent of the IRA holder (e.g. the stock wasn't bought from the holder). Assuming the stock was purchased at arms-length (meaning from a willing seller at that price), then there's nothing improper that I can see. In order for the holder to benefit, the stock would have to be sold and the proceeds withdrawn from the IRA (again subject to all IRA withdrawal regulations).

The stock in question is PayPal stock that was bought in 1999 (a year after its founding) that has grown from $1,700 in 1999 to over $5 Billion 22 years later (a 97% annualized growth rate).