SharesPost.com – Buy Or Sell Privately Held Stock
This new company has the objective of “making private equity liquid” by creating a secondary market where interim liquidity at a fair price can be generated without engaging into any overly-complex operation. As a result, this site (resembling a bulletin board) was built up.
Three main activities can be carried out therein: visualize corporate information, post shares and enter into contracts with others.
The site lets the user post shares anonymously, and shares can be bought easily in a similar manner. The most recent posts are always found on the main page, whereas featured companies are likewise listed there. A description accompanies information such as the industry and the most recent contracts.
Contracts are e-signed after complying with some formalities, and US Bank then contacts the parties to start processing the corresponding transactions.
The team behind this initiative hopes that the creation of secondary markets for private company stocks will lead the way into more data and transparency without having to do an initial public offering or actually sell a company. This system is not that complicated as it might seem, and illustrative videos are included for you to understand its very nuance effortlessly.
SharesPost.com In Their Own Words
“Just about everyone in the private equity industry recognizes that some fundamental problems jeopardize the prospects for the industry’s participants. Many limited partners need to liquidate substantial portions of their private equity holdings but can’t find an efficient way to do so. Venture capital firms are unable to show attractive ROI’s in large part because there is no liquidity on public exchanges into which even their strongest portfolio companies can exit. Founders who have built successful companies for over a decade find their entire net worth still locked up in a single, illiquid asset. Companies have no way to divest shareholders clamoring for a quick sale despite the companies’ great long term prospects. Regulators, in an effort to create greater transparency, have required funds to mark their assets to “market” but, given there actually is no real market, have left everyone scratching their heads.
The central deficiency giving rise to these dilemmas is the absence of an efficient secondaries market for private equity. If buyers and sellers could find each other efficiently and in volume then LP’s and venture funds could find buyers for their equity, founders could gain some measure of diversification and liquidity, companies could create a shareholder base united around a long term vision for growing the enterprise and regulators (and the rest of us) would finally see what price a willing buyer and willing seller would put on a company’s shares. As Fred Wilson of Union Square Ventures said: “[t]he efforts of a few brave souls to create secondary markets for private company stock is going to lead to more data, more transparency, and more liquidity without having to register and do an IPO or sell your company.”
At SharesPost, we set out to solve these problems while complying with the letter and spirit of the securities laws and protecting the interests of companies, investors and entrepreneurs. It’s a big problem and it requires us to balance some competing interests, but we think we’ve done it. SharesPost is all about making private equity liquid.”
Why SharesPost.com It Might Be A Killer
Entrepreneurs are certain to find the provided information and services worthwhile, as they let them see what price a buyer is willing to pay and how much a seller would request for a company’s shares.