There are different rules for the time frame for investors to buy shares, the amount of financial disclosure required and the minimum size of investments. They may set different rules for different types of shareholders. Allowing top employees to sell a portion of their shares on secondary markets can be a boost for morale, Smith added, noting Silicon Valley companies now struggle to attract and retain talent. Companies often give themselves the right of first refusal to buy back stock when insiders sell.
In addition, a good valuation in the secondary markets could be used as a benchmark when entrepreneurs return to the VC and private equity markets for subsequent rounds of financing.
But Georgetown professor Angel said secondary markets can be a double-edged sword. Pritzker, a Chicago-based venture capitalist who heads the technology investment firm New World Ventures. Small Business News Updated. Cohen 7 Min Read. Private equity funds that specialize in purchasing secondary preferred and common stock to provide secondary liquidity to companies and their shareholders:. Due to the right of first refusal process and other potential agreements, easiest and most time-efficient way to obtain liquidity might be to participate in a company sponsored secondary round or secure financing that complies with transfer restrictions.
However, many large later stage companies have experience working with secondary marketplaces like Sharespost, EquityZen, and Forge. Harness Wealth can pair you with the advisory firms you need to provide advice across your financial, tax, and legal concerns for your equity. To identify the right advisory firms for you, get started here. By Harness Wealth — Finances — April 29, Platforms and Marketplaces: EquityZen vs.
The Fund is not suitable for investors who cannot bear the risk of loss of all or part of their investment. The Fund is appropriate only for investors who can tolerate a high degree of risk and do not require a liquid investment. The Fund has no history of public trading and investors should not expect to sell shares other than through the Fund's repurchase policy regardless of how the Fund performs.
The Fund does not intend to list its shares on any exchange and does not expect a secondary market to develop. All investing involves risk including the possible loss of principal. The Fund intends to primarily invest in securities of private, late-stage, venture-backed growth companies. There are significant potential risks relating to investing in such securities. There are significant potential risks associated with investing in venture capital and private equity-backed companies with complex capital structures.
The Fund focuses its investments in a limited number of securities, which could subject it to greater risk than that of a larger, more varied portfolio. The Fund is a non-diversified investment company, and as such, the Fund may invest a greater percentage of its assets in the securities of a smaller number of issuers than a diversified fund.
Portfolio holdings of private companies that become publicly traded likely will be subject to more volatile market fluctuations than when private, and the Fund may not be able to sell shares at favorable prices. Such companies frequently impose lock-ups that would prohibit the Fund from selling shares for a period of time after an initial public offering IPO. Market prices of public securities held by the Fund may decline substantially before the Investment Adviser is able to sell the securities.
The Fund will bear its pro rata portion of expenses on investments in SPVs or similar investment structures and will have no direct claim against underlying portfolio companies.
PIPE transactions involve price risk, market risk, expense risk, and the Fund may not be able to sell the securities due to lock-ups or restrictions. Profit sharing agreements may expose the Fund to certain risks, including that the agreements could reduce the gain the Fund otherwise would have achieved on its investment, may be difficult to value and may result in contractual disputes.
Please read the Fund prospectus for other risk factors related to the Fund. The Fund may not be suitable for all investors. Investors are encouraged to consult with appropriate financial professionals before considering an investment in the Fund.
Companies that may be referenced on this website are privately-held companies. Shares of these privately-held companies do not trade on any national securities exchange, and there is no guarantee that the shares of these companies will ever be traded on any national securities exchange. What is a closed-end interval fund? The Private Shares Fund, as an interval fund, differs from traditional closed-end funds in two important ways: The Private Shares Fund shares are continuously offered by the Fund for purchase by investors at net asset value NAV rather than traded on an exchange in the secondary market.
How do I make an investment in the Private Shares Fund?
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