If you’re looking to maintain the great working relationship you have with your current company, while turning your equity into liquid assets you can use now, SharesPost can help.
An ever-increasing number of shareholders of late-stage private companies are seeking liquidity, and with good reason. As companies stay private longer, the lack of liquidity, and its converse, over-concentration in a single stock, becomes even more burdensome. Even in the bullish cases where shareholders see an IPO on the horizon, they may prefer to take some money off the table today rather than further delay and rely entirely on the uncertainty of a public market’s treatment of the stock price over the 180 day lock up period during which they cannot typically sell their shares.
For the great majority of shareholders seeking to sell private stock for the first time, the process can be daunting. Selling shareholders must: (1) analyze limited information to value their shares; (2) source and negotiate with multiple potential buyers; and (3) retain or have the legal expertise to comply with securities laws, document the transaction and conform to the issuer’s unique transfer protocols. Even where a seller has access to these resources, finding the time needed to manage these tasks is a frequent problem.
Here are some points selling shareholders might keep in mind while navigating these challenging waters.
The first decision to make is whether or not to retain a broker. As the founder of SharesPost, I acknowledge a certain bias when it comes to this question. That said, I believe most sellers are materially better off using a broker. Selling private company shares is a lot more like selling a house than it is selling public company stock online. Few shareholders have the private market expertise, information, network or time to effectively represent themselves. Just as you expect a good real estate agent will more than offset their commission by getting you a better price for your house, a private market broker can make an even greater difference when it comes to optimizing your chances to close a sale for full value.