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 and longer, the lack of liquidity, and its converse, over concentration in a single stock becomes even more burdensome.
For the great majority, though, it is their first time selling private company shares, and the process can be quite daunting. Selling shareholders must: (1) Analyze limited information to value their shares; (2) Source and negotiate with multiple potential buyers; (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 frequently a problem.
Here are some things selling shareholders might keep in mind when 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 through your online brokerage account. Few shareholders have the private market expertise, information, network or time to represent themselves effectively. 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.