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May 12, 2020 · Pending regulatory approval, Forge, founded as Equidate in 2014, and SharesPost, founded in 2009, will merge under the Forge brand after agreeing to a $160 million cash-and-stock deal.
- Disadvantages of SECFI
- When SECFI Is Not Right For You
- Forge Global
- Advantages of Forge Global/Sharespost
- Disadvantages of Forge Global/Sharespost
- Equityzen
- Advantages of Equityzen
- Disadvantages of Equityzen
- How to Decide Between Forge/Sharespost, Equityzen and SECFI
You get less cash upfront
While Secfi lets you tap into the value of your options through financing, you won’t get as much cash upfront as you would if you sold your options instead (even though in the latter case you would lose the upside).
Your exit may take awhile
The full truth is you don’t know when your company is going to IPO. So if you finance instead of selling your options, you don’t know exactly when you’ll experience an exit. If you instead sell your shares on a secondary marekt, you get cash as soon as the deal is done (which is often a matter of weeks or months).
When Secfi is right for you
1. If you think the value of your company is going to continue to grow, want to hold on to the upside, and want to get the most long-term value out of your options 2. If, besides the costs to exercise your options, you don’t need cash right away and can afford to wait for the IPO or acquisition of your company 3. If you don’t have the cash you need to exercise, but want to maximize your tax advantage and save money 4. If you left your company and only have 90 daysto exercise your options
If you think the value of your company has reached its peak and won’t go any higherIf you are “cash hungry” and want to get your hands on as much cash as possible – right nowSharesPost merged with Forge Global in 2020 and now the combined company operates under the name Forge Global. Forge/SharesPost acts as a marketplace for selling private company shares so startup employees can turn their equity into liquid assets (aka cash 💰). It's an advanced platform that has the feel of a publicly traded marketplace. Basically,...
You'll maximize the amount of cash you can get now
Startup employees that want cash now and don’t want to wait for an exit can sell their shares and gain liquidity. This is especially ideal if the employee doesn’t feel confident in the future of their company and isn’t optimistic about the potential value of their shares.
Their platform is a well-designed marketplace
The process of selling shares, looking for a buyer and closing the deal can be messy, so it doesn't hurt to have a well-designed environment to place your listing. Forge also offers helpful visualization tools and some information on recent price points.
You lose the upside of your equity
When you sell your stocks through a secondary market, you get immediate cash but you’re letting go of your ticket to the IPO. Fair warning – you may wake up with a major case of FOMO one day if your company has a successful exit.
You need company approval
Many companies don’t allow selling shares on secondary markets. For those that do, company approval is required to sell on a secondary market. It’s not always in a company’s interest to let their pre-IPO shares be traded, so many of them refuse.
You may run into ROFR
Many companies reserve the Right of First Refusal (ROFR). That means when you attempt to sell your shares, your company can step in and decide to buy the shares back themselves. If that happens, you're still on the hook for the 5% fee to Forge/SharesPost.
Founded in 2013, EquityZen is another secondary market similar to Forge/SharesPost. It works basically the same way. You list your shares and a broker helps you find a buyer. As of 2020, EquityZen also charged a 5% fee on all transactions. The biggest difference is that there’s a $175K minimum sale size (as opposed to $100K with Forge/Sharespost), ...
EquityZen has the same advantages as Forge/SharesPost: if you want to cash out as much as possible on short notice, you can use their platform to find a buyer and sell your equity. Additionally:
The disadvantages of EquityZen are similar to those of Forge/EquityZen: 1. You lose the upside of your shares in a potential future IPO or acquisition 2. You need company approval and might run into ROFR (Right of First Refusal) when trying to sell 3. Buyers often only want to buy your equity at a discount to its current value 4. The money you make...
It really comes down to whether financing versus selling on a secondary market is best for you. Secfi was built for startup employees who want to exercise their options before an IPO occurs, who are looking to save money on taxes (and increase their profit), and/or who only have 90 days to exercise their options and need cash to make that happen. S...
People also ask
Who is SharesPost?
What is SharesPost NASDAQ Private Market?
Who owns SharesPost & forge?
Will forge & SharesPost merge?
May 4, 2021 · In the months since its acquisition of SharesPost, the company tallied three consecutive record-breaking quarters including in Q1 2021 when Forge completed 1400 transactions totaling more than ...
Apr 15, 2011 · A new transaction of Facebook shares on SharesPost gives the social networking giant a valuation of $80 billion. ... The auction consisted of 100,000 shares of Facebook Class B Common Stock priced ...
Mar 15, 2012 · SharesPost paid penalties of $80,000 to settle the case, while Brogger himself paid $20,000. In the wake of the investigation, SharesPost acquired a company with a broker-dealer license. That move ...
6 days ago · Accelerate your future with Forge's private market solutions. Get access to pre-IPO investment opportunities and liquidity for your private company shares.
About SharesPost Stock. Since 2009, SharesPost has been a leader and innovator in private securities investments. Based in Silicon Valley, SharesPost has created one of the largest, most active networks of shareholders, investors, issuers and entrepreneurs by offering products and services for late-stage, venture-backed private growth companies.
