EquityZen

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EquityZen
Company typePrivate
IndustryFinancial technology, Investment
Founded2013; 11 years ago (2013)
FounderAtish Davda (CEO)
Shriram Bhashyam
Phil Haslett
Headquarters
New York City
,
U.S.
Area served
Worldwide
ProductsSecondary Market
ServicesElectronic trading platform
Online marketplace
Websiteequityzen.com

EquityZen is an online marketplace for trading pre-IPO employee shares from privately held companies.[1][2] The platform often links employees from private companies with investors who would not otherwise be able to invest in the company prior to an IPO.[3][4] EquityZen is based in Manhattan's Flatiron District.[5]

History[edit]

EquityZen was founded in 2013 by Atish Davda (CEO), Shriram Bhashyam, and Phil Haslett in New York City.[1][6][7] From its outset, EquityZen was designed to allow employees of private companies to sell their equity in the company to accredited investors.[4][8] The firm started out as part of the 500 Startups accelerator program in the fall of 2013.[9][10] The company received seed funding in January 2014[11] and as of September 2015 had raised Series A funding from undisclosed investors.[12][13] EquityZen has raised $6.5 million in outside financing, including a $3M injection in 2017 led by Tim Draper's Draper Associates.[14] The financial technology firm was recently mentioned in Forbes' Fintech 50 list.[15]

Service[edit]

EquityZen operates a marketplace in which employee shareholders in private companies can make their equity available to outside investors. In addition to traditional share transfers, EquityZen introduced a new offering in the private shares market by working with the issuer to register a transfer of shares so employees and early investors can sell a portion of shares for cash without having to wait until an IPO or acquisition.[1][16][17] The firm works exclusively with companies that have already raised capital from large, institutional investors.[3] Companies need to have at least $50 million in enterprise value to be listed on the marketplace.[18] The minimum investment amount for investors is $20,000.[3]

Financial Advisors, who manage capital on behalf of others, invest their clients' capital through the platform.[19] Investors outside of the US have invested in private companies.[20][21] EquityZen has transacted in over half of the largest 25 private Venture Capital-backed companies, such as prominent companies including Lyft, Evernote, and AppNexus.[1][22][23]

References[edit]

  1. ^ a b c d Messina, Judith (22 January 2014). "A new way to buy shares in startups". Crain's New York Business. Retrieved 6 November 2015.
  2. ^ Picker, Leslie (4 November 2015). "Risking Your Neck to Run With the Unicorns". The New York Times. Retrieved 6 November 2015.
  3. ^ a b c Kenwell, Bret (1 April 2015). "EquityZen Shows the Way for Investing in Privately Held Companies". TheStreet.com. Retrieved 6 November 2015.
  4. ^ a b Mott, Nathaniel (4 November 2013). "Meet EquityZen, the company borne from its co-founder's need for an engagement ring". PandoDaily. Retrieved 6 November 2015.
  5. ^ McEnery, Thornton (9 January 2015). "Investment deal may ease IPO pressure on MongoDB". Crain's New York Business. Retrieved 6 November 2015.
  6. ^ "Giving investors access to pre-IPO shares". Fox Business. 24 February 2015. Retrieved 17 November 2015.
  7. ^ Hook, Leslie (2 June 2015). "Private share trading takes off as tech companies shun IPOs". Financial Times. Retrieved 6 November 2015.
  8. ^ Bort, Julie (7 December 2013). "Here's How Hot Startups Help Employees Cash Out Before An IPO". Business Insider. Retrieved 6 November 2015.
  9. ^ Lawler, Ryan (5 February 2014). "My Favorite Companies From The Seventh 500 Startups Accelerator Class". TechCrunch. Retrieved 6 November 2015.
  10. ^ Yeung, Ken (29 October 2013). "500 Startups reveals its 7th batch of accelerator startups, which includes its first biotech company". The Next Web. Retrieved 6 November 2015.
  11. ^ "EquityZen Obtains $450,000 New Funding". Xconomy. 29 January 2014. Retrieved 6 November 2015.
  12. ^ "EquityZen Lands Series A Investment". VentureDeal. 17 September 2015. Retrieved 6 November 2015.
  13. ^ "EquityZen Secures $3,499,994 Series A Round". Xconomy. 16 September 2015. Retrieved 6 November 2015.
  14. ^ Newswire, PR (2017-07-18). "EquityZen Raises $6.5 Million; Draper Associates Leads $3M Infusion". PRNewswire.
  15. ^ Novack, Janet (9 December 2015). "Introducing The Forbes Fintech 50". Forbes. Retrieved 9 December 2015.
  16. ^ Liesman, Steve (2016-08-10). "Executive Edge: Private Investing". CNBC.
  17. ^ Evans, Kelly (2017-03-03). "Investing in the private market: Should it become easier?". CNBC.
  18. ^ Anan, Ritesh (16 December 2014). "EquityZen: A Stock Market For Private Companies". Benzinga. Retrieved 6 November 2015.
  19. ^ "The Pre-IPO Investment Opportunity in a Down Market". Advisor Perspectives. 22 February 2016. Retrieved 2 February 2016.
  20. ^ "EquityZen helps Indian investors to invest in US companies". The Economic Times. India. 2 March 2016. Retrieved 2 March 2016.
  21. ^ "EquityZen helps Indian investors to invest in US companies". The Times of India. India. 2 March 2016. Retrieved 2 March 2016.
  22. ^ "A Rare Look at Small Investor Deals in Private Tech". The Information. Retrieved 17 November 2015.
  23. ^ "Movement in Secondary Market". CNBC, Squawk Alley. Retrieved 26 April 2016.

External links[edit]

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